2020 has shown us how quickly circumstances can change and the importance of fluid business models that are both able and willing to adapt to these new operational contexts.
We've collated six trends that are (re)defining the new reality for carriers through breaking down consumer insights, global trends and key findings from working across some of the largest insurance carriers around the world.
The Health Hurdle
Operating a commercial enterprise amid a global health pandemic has forced businesses to closely consider their practical health operations from guidelines to strictly enforced rules.
This comes into play in managing our own workplaces – offsetting risk and reward with a greater emphasis on the role of our people as our most valuable assets - creating safer workspaces and adopting new ways of working enabled by greater work from home capabilities.
Plus, the pandemic has called into question how insurance carriers manage their businesses, outsourcing and collaborating to best navigate how they can continue to support customers in a new virtual context.
Innovate or implode
In March 2020, much of the developed world transitioned to a remote workforce almost overnight. This massive change illustrated that businesses have the capacity to innovate far more quickly than they let on (or indeed believed), and gave markets, companies and consumers an appetite for impressive innovation.
Instead of doling out initiatives in small doses, there’s a call to reconsider ‘the way we’ve always done things’, cutting a path for new ways, new initiatives and new ideas. Looking to drive cost and operational efficiencies, many insurance carriers are outsourcing segments of their operations to third party administrators, leveraging TPA’s existing infrastructure, systems and expertise to reduce risk while enhancing profitability.
At Gallagher Basset, from managing a claims surge to introducing new insurance products, we’re finding clients are increasing their engagement and outsourcing profile, leading to greater innovation within their business, and better opportunity to profit from innovation in the market.
The future is digital (and it started yesterday)
With strict limits and, in some cases, total bans on face-to-face communication, workers were pushed into digital delivery formats and companies pushed to find new ways for their people to connect and collaborate online.
Those surviving these turbulent times the best are the ones who have found ways to expand their customer support through virtual and remote means. In the early days of the pandemic, the whole world struggled to adapt and there was a greater sense of comradery (and forgiveness) as everyone found their feet. Now, with the new-normal established, customers are expecting more.
Those best able to create end-to-end communication, either through their own systems or by outsourcing claims management processes, are ahead of the game. Consideration must also be given to cyber security, and pursing data management protocols capable of adapting to rapid change while still preserving confidentiality of sensitive client and commercial information.
The blended environment
As the dust settles, we’re seeing the rise of the ‘new’ normal – both in our own arrangements, and the products gaining focus in the market. The increasing hike in the unemployment rate and benefits of a remote-working environment represents an opportunity to secure new high-quality talent with diverse skillset from many locations, who complement existing teams.
We may also see contact centres and indeed claims handling adapting to increased automation and self-service as customers embrace the convenience of digital communication.
Our advice? Stay flexible – both in managing your workforce, and in discovering new ways to serve your customers. And commit time, resources and training to reviewing business continuity planning and protocols - be prepared for numerous takes on ‘the way we work’ and prepare key personnel accordingly.
Financing the unknown
CFOs are in the hotseat: navigating the unknown, facing immense uncertainty in managing cost pressures while maintaining liquidity and capital. Some volatility is to be expected – and shareholders and customers alike were tending towards a greater sense of compassion as the world struggled to find its feet.
But now it’s time for action, increasing real-time modelling to enhance decision making; and exploring new and detailed cash management strategies for ongoing liquidity.
At the same time, with the downturn in financial markets we should expect further movement from traditionally stable products linked to commercial loans and real estate, and keep a close eye on equity markets, low interest rates and credit issues.
Preparing for future of increased risk
Rising temperatures and sea levels look to be the harbingers of increasing global impact, putting systems, economies, the environment and even humanity at risk, while the dual health and economic crisis of 2020 have put greater attention on the need for risk protection on the unknown.
The impact of these unforeseen risks can be felt from the backyard to the boardroom, causing devastation to people, places and profits. But it’s not all doom and gloom; from risk comes new business opportunities for savvy carriers to capture new markets, grow their profitability, create tailored product lines and modernize their CSR initiatives aligned to society’s altered values.
There are now new risks to insure, including those related to new industries such as sustainable energy and those born of the evolving needs of today’s workplaces. Ones that demand bespoke product solutions including usage-based insurance, gig-economy income protection, pandemic business interruption coverage and remote-working cybersecurity protection to name a few.
In short, the world is becoming more aware of the risks on our doorstep, and changing the way things are done, necessitating constant evolution and preparation to capitalize on the next big risk event.
With a dedicated carrier service model, GB has the expertise to help you execute your business plan and ensure you are prepared for potential disruptions. Interested in how Gallagher Bassett can help you find the next big opportunity? Find out more today!