Gearing up to social distancing barrier for life Insurers

By Rana Biswas, Vice President,Wealth & Insurance APAC,Equisoft | Wednesday, 15 July 2020, 13:48 IST

In many ways, India faces the same challenges as many other parts of the world when it comes to responding to the issues presented by Covid 19. Halting the spread of the virus requires access to sufficient PPE to protect health care workers and the public. Testing and tracking need to be implemented on a large scale. And, social distancing requirements which have locked down most of the country are necessary to slow the spread of the disease through our densely packed population.

1.3 Billion people are relying on those measures.

So far, we’ve been good at limiting the number of new cases as a percentage of our population. But that has been achieved at the cost of physical engagement. Social distancing is not going to end soon. And even when it does, we’re likely to see permanent changes in the way we live and work. Travel will likely not be as easy and convenient as it used to be. There will be fewer in-person meetings and more remote connections. For some, the days of going to work in a crowded office may be over.

This new reality will require Insurance companies in India to find innovative ways of running their businesses, relating to clients and reacting to swings in markets, consumer behavior and regulation. It means accelerating the digital transformation that has been talked about for years but has not yet widely been embraced.

What unique challenge does Working from Home (WFH) present for insurers?

The good news for our country is that considering the size of our population, the number of confirmed cases and the mortality figures are relatively low. To ‘flatten the curve’ and avoid the types of spikes other nations have experienced, we will need to maintain the physical distancing measures we’ve already put in place. Difficult as it is, maintaining the physical gap between each other is the best answer we have right now.

A recent Celent Poll revealed that 97% of respondents had officially invoked their BCP plans or specific pandemic flu plans. In almost all cases, those plans require everyone except for a handful of ‘essential’ employees to work from home.

For the insurance industry, WFH presents a unique and significant challenge. Many industries are much further along in their digitalization journeys than insurance. Digital tools make it fairly straightforward for them to adapt to remote work. In our industry, in India, the reality is much different.  

The decades old legacy systems that most companies rely on to run many aspects of the business—everything from claims, to billing, to underwriting and more—have always been a weak link. But almost overnight, they have become very severe impediments to conducting business as usual.

These aging systems make remote connections difficult. Data is hard to access. The manual workflows we use as workarounds to process an app or cut a cheque are hard if not impossible to implement. How can underwriters and claims staff perform effectively when the data they need is not readily available?

Digital transformation and specifically, Policy Administration System (PAS) modernisation, was always a consideration—something that had to happen someday. CIOs have spent years working to maintain their aging infrastructure and create patches that enable their business to continue to compete. The new reality creates a bigger burden for them.

If they could, everyone would have preferred to modernize already. We’d already be reaping the benefits of rules-based back-office systems that enable streamlined data flows, better integration, easier remote access and quicker responses to market changes.

Now, almost overnight, those longer-term considerations about whether or not to upgrade legacy PAS and migrate their data to a modern platform, have been turned into issues that need to be confronted today.

The tipping point is here.

While modernization is not an overnight event, the decision-making process that can get you started on the journey can be started today. It can become a part of corporate strategy and BCP that helps ease current hardships and offset those that may come.

That is the opportunity within the difficult times we’re moving through—to enable underwriters, claims and other staff to effectively continue to do their jobs remotely; to reduce reliance on IT and put control in the hands of the business units; to accelerate innovation so that new products and services can be more easily created to respond to volatile markets and new regulation.

How can insurers bridge the social distance gap and deliver on high customer expectations?

For years, insurance companies have focused on how to meet customer expectations that have been heightened by consumers’ online interactions in other industries. Amazon’s One-Click shopping, Netflix’s highly personalized recommendations, even the ability to track food deliveries to your door have created demand for accelerated, targeted online service.

Insurance has not kept pace.

Our current situation has taken customer expectations for online service to an even higher level. In a time of stringent social distancing, advisors can no longer meet face-to-face with clients. Clients can’t visit their local branch to make policy changes. In India, this presents bigger challenges than in some other countries since the vast majority of insurance sales are still being made face-to-face—perhaps more than 90% of them.

That creates a big potential challenge. Generating new business premiums is heavily dependent on the in-person efforts of the agency and bancassurance sales forces.  But how will those sales be made when advisors can no longer meet prospects in their homes or receive them in their offices? What happens when consumers can’t enter a bank branch to discuss a new policy? First year premiums are the engine of growth for our industry. Without them, what are we going to do?

Integrated digital front-end solutions are required to bridge the social distance gap. Advisors need to be able to connect with clients remotely—through Skype or similar tools, even by phone—and walk through a digital Financial Needs Analysis and online illustrations. In order to remotely onboard customers, tools like e-Applications, e-Signature capability, online advisor and client service portals will become essential.

What does the future hold for insurers and their BCP efforts?

Social distancing has put the spotlight on the need for insurance companies to reduce spending and maintain margins even more than before. Less face-to-face interaction puts pressure on revenue. Market volatility affects the investments that underpin many products.

The onus is on insurers to find ways to increase productivity and efficiency. In order to persevere through difficult times like this and prepare to meet the challenges of those to come, companies should be thinking strategically about investments that will enable automation, increase efficiencies and strengthen customer relationships.

Comprehensive digital strategies can make business continuity planning a much easier and more reliable process. Integrated back-office and front-end solutions can make working from home a more effective and attractive proposition. A modern, rules-based PAS coupled with digital tools like e-Apps and client portals enable all industry stakeholders to stay connected. Customers will receive the accelerated, highly personal care they desire. Advisors will be able to meet with prospects and clients either in person or at a distance. These integrated systems will go a long way towards reducing the strain on the bottom-line and make it easier for us all to stay safe and prosper in the years ahead.