How COVID-19 accelerates the digitalisation of the insurance customer journey
Article information and share options
COVID-19 has made us uncomfortable and anxious. It's also fair to say that it has changed us … and our habits. My colleagues have addressed this pandemic from several angles already, so I'm going to stick to just one – digitalisation.
Throughout human history, every challenge we've faced has made us more resilient. This pandemic is yet another example of "life-changing." So, it's especially crucial that we understand how the insurance industry can adapt to the changing market needs.
In a piece I wrote for a Swiss Re audience, I wrote of a "Kodak moment" – when companies or industries fall by the wayside because of their stubbornness to adapt or realise that the world is adapting and leaving them behind. Kodak is one example. Other prime exhibits include: Pan Am, Nokia, BlackBerry, Blockbuster Video and MySpace.
The last example is probably one of the more recent examples of how tech so rapidly transformed that a pioneer tech company got left by the wayside.
The Swiss Re COVID-19 APAC Consumer Survey in April 2020 showed that the pandemic has transformed consumers' view on insurance products and the way they purchase insurance. It is not surprising to see consumers' interest in Life & Health insurance has increased since the COVID-19 outbreak, especially when insurance companies have proactively contacted their customers.
The survey was conducted in Hong Kong, Singapore, Beijing, Shanghai and a number of Australian cities – all highly connected locations with high-speed networks. Whatever it is called - lockdown, "Circuit Breaker" or social distancing – it has altered our attitudes towards daily life via smartphone, tablet or laptop whether forced or by choice.
Whether we're buying, selling, ordering, delivering or working, it's taking place online.
To reinforce this, we have found that consumers express a strong desire to buy new policies and submit claims through digital channels. Drawing on the survey results, the unprecedented environment has now highlighted the importance and opportunities for insurers to elevate their digitalisation plans.
Hybrid models key to retaining policyholders in the wake of COVID-19
The insurance industry has long acknowledged the urgency of undertaking digital transformation. Our survey further illustrates how insurers with stronger digital capabilities will be in a better position to meet consumers' expectations in future.
For a majority of respondents in the four major markets surveyed, selecting an insurer that is able to process their policies online end-to-end was a priority, with respondents in mainland China topping the survey at 77%. In terms of claims processing, improvements to speed and flexibility when processing claims is key to consumers in Singapore (57%), Hong Kong (55%) and mainland China (66%), especially if they were to make a claim at a time of a public health crisis.
Despite the fact that consumers are looking for online purchases, agents and brokers still have a unique, strong role to play. Respondents across all markets indicate that looking more closely at coverage details will be the biggest influence of the COVID-19 outbreak on their purchasing decisions. This underlines the need for expert – and trusted – advice. It also highlights the ongoing importance of intermediaries in customer engagement, especially when customers are unfamiliar with their specific protection needs.
Therefore, the insurance industry must digitalise our distribution channels in tandem with hybrid models and assisted sales to ensure that consumers are provided with the right information and different options when purchasing insurance. This also represents an excellent opportunity to introduce behavioural economic and human-centred design principles into the insurance customer journey.
Pushing digital healthcare forward with insurance
The physical isolation during COVID-19 has accelerated a trend towards increased digitalisation across industries. This trend is likely to be particularly pronounced in the healthcare industry which has been at the heart of the pandemic.
The global lockdown and ongoing care of chronic patients have raised awareness of the state of play in digital healthcare, remote monitoring and diagnostics. Around half of the survey respondents identified healthcare services (e.g. virtual medical consultation) as the most impactful value-adds. This trend will have both short-term and long-term impact. While shifts in healthcare trends can introduce new risks into our portfolios on the whole, the life & health insurance sector should embrace the opportunities presented by this trend.
With our risk assessment knowledge and partner network, we are keen to support insurers in designing the financial protection that consumers need. A digital healthcare ecosystem has multiple benefits for all of us, and with 5G already being rolled out in parts of Asia, it's just a matter of time before those that choose not to go down this path will be left behind.
Joining forces to complete the digital customer journey
COVID-19 has prompted consumers to review their own personal protection gap and re-consider the merits of stable, longer-term protection. As we expect stronger customer demand for health and life insurance products, it's time for us to rethink what values we can add for our customers and how should we speed up and plan ahead for the imminent wave of digitalisation.
The writing's on the wall (or tablet): Change, adapt to your end-user's needs or be left behind in another Kodak moment.