Pandemic Reshapes Insurance Industry in Tune with New Normal

Covid-19 has brought about an enormous change at a global level impacting everything from our day-to-day lives to businesses. The pandemic caused chaos which has brought a significant shift in many aspects of industrial processes. The way we see a lot of things operating today would have been different a couple of years ago. 

Trade, business, travel, economy, and all other sectors has experienced transformation and changed our perspectives about these elements. Amongst them, the insurance industry has also seen a shift in paradigm in terms of products, services, operations, processes, claims.

Covid-19 is most definitely a hazard, not just medically but also on the financial level. But the thing is that hazards and immunity against it go hand in hand. The insurance industry has been recalibrated on many levels to ensure that Covid-19 coverage is offered to every insured and no extra financial pressure is added on the shoulders of them or their family (owing to the financial liability due to medical expenses). There have been few mandatory changes made in order to handle the situation effectively. 

In a nutshell, there are different ways in which the change is evident in the insurance industry and three of the significant ones are explained below:

Covid Coverage as a Service: 

Coronavirus has been ravaging through this world and causing a pandemic, a term mostly unheard of before 2019-2020 but coined after the catastrophic impact on human life. The virus has been known to have a massive death toll across the world, with over 3,359,004 death cases reported worldwide so far. With 3,43,144 people testing positive for Coronavirus on May 14, India's Covid-19 tally rose to 2,40,46,809, with 2,62,317 deaths and 4,000 fresh fatalities.

Considering the fatality rate associated with Covid-19, insurers have been offering immunity by introducing standard products. Seeing the need for insurance plans which focus especially on the treatment of the Coronavirus, plans like ‘Corona Kavach’ and ‘Corona Rakshak’ policies were introduced. The intention behind introducing these plans was to protect policyholders from any financial trauma that can come with medical treatment pertaining to the virus. 

In addition to this, the Covid-19 spread has enforced faster processing timelines for claims, cashless services with hospitals, and a substantial coverage amount to ensure utmost protection. Recently, Insurance Regulatory and Development Authority (IRDAI) has also given out advisory for the effective handling of cashless claims to the insured and at the same time settling the claims faster.

Digital Presence: 

The physical spread of the Covid-19 virus has made everyone a digital nomad. A sizable increase in online transactions, payments, purchases, has been seen since the global spread, and the insurance industry is no exception. This has made the insurers have a strong online presence with a plethora of services that can benefit a policyholder. 

From ensuring quick payments online to uploading documents from the safety of their home, policyholders thrive for ease of use in an agile manner in just a few clicks. Some of the digital services that the insurers have been heavily focusing on during this pandemic has been easy access to the details about coverage and policy, better comparison option, the completely digitised application process, swift insurance premium payments, and hassle-free claim settlement process. Also, post the outbreak of Coronavirus, insurers have added special focus towards implementing automation to the process for seamless and quick customer experience,

The pandemic has proved that the lack of digital enablement would not be pleasantly accepted by the customers, and so better use of the data and digitisation would be the key to transformation and better service to the customer. The insurance industry has already started to explore different digital ways in regards to the willingness of the customers and moving more online for their insurance needs.

A Shift in Paradigm: 

There are several types of insurance services that contribute differently to the overall industry. However, in the past year and a half, a major shift in the contributions has been observed across various types of insurance services. Whilst health and life insurance have seen a growth in its demand, other insurance policies’ demand has been noticed to take a back seat due to the ‘stay-at-home’ enforcements imposed by the virus spread. 

Houses have become the digital fortress for work and business, and thus, the premium collection for other insurances has been on a steep decline. This is said to be a temporary disbalance, and experts predict this to change in the coming years, but until then, there has been a shift in focus by all insurers to make sure they have a major chunk of the market.

It is evident that the pandemic has been volatile and unpredictable in every which way, keeping an open end to the question, ‘What more is subject to change?’. Demands are constantly changing, and so are the customer expectations. The insurance industry needs to keep up with the new dynamic behavior of the consumer to emerge as a sustainable industry and a key contributor to the GDP.

The author is Director, Probus Insurance

DISCLAIMER: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.