How Covid-19 Remodeled the Insurance coverage Business

This submit is a part of a sequence sponsored by AgentSync.

Throughout the insurance coverage distribution channel, everybody from the most important carriers to particular person insurance coverage customers have witnessed a “digital transformation” to some extent previously three years. We’ve seen it by means of a rising variety of insurance coverage know-how firms, an elevated funding in software program (each inner and buyer going through), and new developments in automating beforehand guide components of the insurance coverage underwriting course of – simply to call just a few examples.

COVID-19 hasn’t disappeared, however the world has began to resemble pre-pandemic occasions in some ways. Whereas some issues are returning to how they have been earlier than COVID, the technological leap ahead we see within the insurance coverage business isn’t one thing that may revert, nor would we would like it to! Quite the opposite, it seems that COVID-19 helped the insurance coverage business hit the fuel pedal on modernizing work practices, buyer expertise, and operational effectivity.

As we strategy the three-year mark of when the world mainly shut down, we needed to take a look at what sorts of modifications COVID dropped at the insurance coverage business, and in the event that they’re right here to remain.

The insurance coverage business has been making an attempt to place its quaint, low-tech fame behind it lengthy earlier than anybody heard the phrase “COVID-19.” Whether or not that’s by way of an ever-growing listing of insurtechs (backed by billions of dollars per year of enterprise capital), or by legacy insurers and brokers making an attempt to enchantment to a brand new technology (each of customers and employees), the dialog about modernizing insurance coverage isn’t a brand new one.

Regardless of decades-long efforts, and incremental enhancements, the insurance coverage business in 2019 seemed surprisingly just like what it had 10 and even 20 years prior. Many insurers and insurance coverage companies massive and small nonetheless required workers to work from centralized workplace areas and relied on spreadsheets, shared community drives, in-person conferences, moist signatures, and exhausting copies to conduct enterprise. Then, a pandemic occurred and the world needed to alter actually in a single day. Organizations that had already invested in additional digital instruments have been forward of the curve, however in the end, each insurance coverage group needed to change into extra fashionable to outlive.

Ask anybody who’s labored at an insurance coverage provider, company, MGA or MGU, FMO, IMO, BGA, or every other insurance coverage enterprise: Most certainly, they’ll inform you about working in an workplace and counting on guide processes to get issues accomplished. Day-to-day actions included telephone calls, in-person conferences, visiting shopper areas, dinners and drinks with prospects and shoppers, and plenty and plenty of typing info into paperwork throughout a number of techniques.

Relying on the person group and its degree of digital sophistication, workers might have relied strictly on e mail for digital communications or they might have had skype or one other sort of prompt messaging. Many insurance coverage companies had company administration techniques, however many additionally managed their enterprise utilizing spreadsheets and even paper paperwork.

Insurance coverage carriers earlier than COVID-19

Earlier than the COVID-19 pandemic, insurance coverage carriers have been already utilizing a wide range of applied sciences to automate and streamline their operations. It was 2019, not the stone ages, in any case! Examples of know-how insurance coverage carriers usually employed included software program to deal with coverage underwriting and claims processing, in addition to the usage of knowledge analytics to raised perceive buyer wants and threat profiles.

Insurance coverage carriers have been additionally beginning to undertake newer applied sciences, comparable to synthetic intelligence (AI) and machine studying (ML), to enhance their operations. The biggest and most tech-savvy insurance coverage carriers have been utilizing know-how to investigate massive quantities of information and determine patterns and tendencies that might assist them make higher knowledgeable selections about threat evaluation and coverage pricing. On the customer-facing aspect, they have been additionally utilizing digital platforms and instruments to work together with prospects and distribute their merchandise. This included the usage of on-line portals and cell apps to permit prospects to buy insurance policies, make funds, and file claims.

Nonetheless, in a late 2020 interview with Brandon Carter, President of USAA Life Insurance coverage Firm, Carter reveals the extent to which USAA was entrenched in additional dated practices previous to the pandemic. For instance, Carter says that 90 % of the insurer’s then 35,000 workers labored out of an workplace location. And, as is frequent in life insurance coverage, all candidates wanted an in-person medical examination earlier than their insurance coverage might undergo underwriting. These are a few areas that will see a giant overhaul largely because of the stress USAA felt from the impacts of COVID-19.

Insurance coverage companies and brokerages earlier than COVID-19

Based on one company worker we spoke with, previous to COVID all 30 members of the company’s workers labored from the workplace full time and had desktop PCs. The company needed to develop however struggled to draw the most effective expertise as a result of they have been restricted to hiring domestically, since they required in-office work. By way of operational tech, the company had Outlook for his or her e mail and Skype for interoffice prompt messaging. That they had an company administration system, however no different types of automation or know-how to talk of (automated producer compliance administration, for instance).

This story isn’t distinctive. From firsthand expertise, and from talking with producers and account managers at a wide range of insurance coverage companies, working from a central workplace location was usually non-negotiable earlier than March, 2020. Insurance coverage brokers carried out most of their enterprise in-person by touring to shopper areas or internet hosting prospects and shoppers at their workplace. Thus, the quantity of know-how in place to facilitate actual time digital communication and collaboration between workers and shoppers was minimal.

In March of 2020, most U.S. workplaces shifted as many workers as doable to distant work. Solely important providers like hospitals, police departments, and grocery shops stored workers coming to their bodily working areas. As important as our bodies in chairs had appeared to many insurance coverage business professionals, the reality was that almost each member of the insurance coverage distribution channel might work simply as successfully from house – with the fitting instruments to help.

Digitization at insurance coverage carriers in the course of the pandemic

In an interview from late 2020, Brandon Carter, President of USAA Life Insurance coverage Firm remarked that lower than 2 % of his workforce remained within the workplace, in comparison with 90 % earlier than COVID. He additionally stated that his workers had maintained their extraordinarily excessive ranges of buyer satisfaction all through 2020, proving that almost all of USAA’s insurance coverage workers might do their jobs from house simply in addition to in an workplace.

On the similar time, COVID introduced alongside larger demand for private strains insurance coverage merchandise like life and medical insurance, in response to a study published in the journal Procedia Computer Science by Dariusz Pauch and Anna Bera. The upper demand for these merchandise meant insurance coverage enterprise was booming and competitors between carriers to offer the most effective buyer expertise – and the most effective expertise to their downstream distribution companions – grew to become much more essential.

Different areas of digitization and modernization Carter spoke about implementing at USAA because of COVID-19 embody:

  • Shifting extra sources to making a solution to automate life insurance coverage underwriting utilizing individuals’s medical data and “huge knowledge” as an alternative of an in-person medical examination.
  • cell apps like Uber and Amazon for how you can create a frictionless buyer expertise for individuals wanting to buy life insurance coverage.
  • Taking a web page from consumer-favorite manufacturers’ books when it got here to re-engaging with prospects after the preliminary buy (e.g. newsletters, surveys, reminders, outreach).

USAA is only one instance of what was taking place at insurance coverage carriers in the course of the top of the COVID-19 pandemic to shortly shift to safer, socially-distanced, and digital operations. Conveniently, adopting these practices is what insurance coverage customers had been hoping for all alongside, which can have contributed to larger earnings (each in life, health, and P&C) within the 12 months following pandemic-induced digitization.

Digitization at insurance coverage companies and brokerages in the course of the pandemic

Insurance coverage companies weren’t fully with out some fashionable know-how on the finish of 2019, however they have been largely office-based and should have used simply the fundamentals like e mail and inner prompt messaging. Based on an AgentSync buyer we spoke with, her company jumped into motion as quickly because the COVID lockdowns began and received laptops for each worker, the place most had been tied to desktop PCs beforehand.

With all the company’s workers working from house, management was stunned to see that nearly everybody thrived within the distant setting. This can be a frequent story: Companies compelled to go distant by the virus have been shocked that productiveness, earnings, and shopper service didn’t endure.

Nevertheless, some individuals, together with this company’s leaders, missed the neighborhood of being collectively in individual. Round September 2020, they began having individuals are available in on designated days, for instance business strains workers on particular days and private strains workers on others. This compromise allowed these craving their outdated type of labor an opportunity to take action in a safer manner in the course of the pandemic. On the similar time, most individuals have been nonetheless working remotely the vast majority of the week. It was at this level that the company invested in new tech instruments like Office365, Microsoft Groups, and Zoom to allow continued collaboration and productiveness with its newly hybrid workforce.

One other improvement that caught was the “COVID informal” costume code. The place this company’s workers had been required to put on enterprise informal costume whereas they labored within the workplace full time previous to COVID, management acknowledged that insurance coverage workers working at their desks might just do as nicely sporting no matter they have been snug in. Whereas not a technological enchancment, this modernization speaks to an total evolving tradition on the company.

The company additionally underwent a hiring growth in 2021 and 2022, thanks partly to its modernized tradition and the flexibility to decide on expertise from anyplace within the U.S. As of early 2023, the company has created one other “sister company,” employed over 30 new workers (a lot of whom are completely distant), and continues to put money into know-how – like AgentSync – that creates extra time for workers to do their most precious work whereas know-how does the remainder.

It’s March, 2023 and life appears very completely different from three years in the past in nearly each manner conceivable. For some individuals, the complete COVID period has light into the background, and so they reside their lives as if nothing occurred. For others, incorporating COVID security protocols into their day by day lives has change into the “new regular.”

For the insurance coverage business, we’ve received our personal “new regular” and that features a degree of know-how utilization and digitization by no means earlier than seen. Like toothpaste that may’t be put again into the tube, insurance coverage professionals have seen a distinct manner of working that’s an enchancment over “the way in which it’s at all times been accomplished” for a lot of, and so they don’t need to return.

The digital affect of COVID-19 at insurance coverage carriers three years later

Based on a 2021 insurance CEO outlook survey conducted by KPMG, 96 % of insurance coverage CEOs attribute their firms accelerated uptake of digital working fashions to stress from the COVID-19 pandemic. Throughout the board, these insurance coverage digitization efforts seem to fall primarily into 4 areas.

Buyer expertise

Insurance coverage carriers largely notice that there’s no going again to the outdated days of customers simply taking what they might get. Folks looking for insurance coverage have so many selections at their fingertips and might usually use their cell phone to get prompt quotes from a number of insurers on-line.

Shoppers’ expectations didn’t simply change in 2020 however insurers’ response to them did. KPMG’s survey confirmed that 50 percent of insurance CEOs say the pandemic so dramatically accelerated their race to create a seamless digital shopper expertise that they’re now years forward of the place they anticipated to be earlier than COVID got here onto the scene.

At USAA Life Insurance coverage Firm, which has at all times prided itself on being a frontrunner in digitizing the client expertise in response to president Brandon Carter, buyer expertise and buyer satisfaction are central to success. Within the years for the reason that pandemic began, USAA Life Insurance coverage Firm has continued to look to non-insurance apps for inspiration on making a optimistic digital expertise together with: digital channels for buyer interplay, digital instruments for outreach and re-engagement, and digital claims dealing with to make the expertise as seamless as doable.

Worker expertise

In an business that faces a largely aging and retiring workforce, and a lack of sufficient new talent coming in to fill these roles, worker expertise is a significant alternative for insurers to leverage digitization to their benefit. And for the reason that begin of COVID-19, insurers have stepped as much as the problem. The USAA Life Insurance coverage Firm’s transformation from 90 % in-office to 98 % distant employees illustrates the entire 180 that many insurance coverage carriers have been by means of. Insurance coverage carriers have additionally put emphasis on worker expertise by investing extra in digital instruments that ease workers’ burdens and allow them to deal with the work they need to be doing.

Automating repetitive duties

Based on Brandon Carter, President of USAA Life Insurance coverage Firm, probably the most pure place for insurers to proceed evolving is within the automation of mundane processes. We occur to agree! For any insurer making an attempt to cut back prices and stop worker turnover, getting software program to tackle repetitive and mundane duties as an alternative of individuals is a win/win. Sidenote: If one among these duties occurs to be manually monitoring and verifying producer license and appointment standing, AgentSync has some nice information for you.

Scaling determination making by means of synthetic intelligence (AI)

Synthetic intelligence is getting plenty of consideration today, and it’s exhausting to know what’s going to be impactful and what’s simply hype. For insurers, AI presents a really actual alternative to scale determination making that was as soon as solely doable by people.

For instance, insurers can dramatically pace up underwriting and claims processing by taking info that’s traditionally been saved inside workers’ minds and creating determination frameworks that may settle for huge knowledge inputs and output selections at a pace thousands and thousands of occasions sooner than a human. If accomplished nicely, scaling determination making by means of AI will unlock individuals to do extra high-impact work whereas concurrently pleasing prospects with unprecedented pace in coverage underwriting and claims cost.

The digital affect of COVID-19 at insurance coverage companies and brokerages three years later

Most insurance coverage companies don’t have the identical sort of sources at their disposal as an insurance coverage provider. For them, the lasting impacts of digitization from COVID-19 appear to be largely in worker expertise and the way in which they serve shoppers.

After all, worker expertise is under no circumstances unrelated to implementing know-how that makes everybody’s jobs simpler by automating repetitive duties, or just offering a contemporary expertise. Companies that had beforehand labored out of a single workplace location might have out of the blue realized the advantages of a cloud-based software program for his or her company administration system when it by no means appeared mandatory earlier than. They could have additionally out of the blue realized the magic of a Zoom account to maintain brokers and CSRs in touch with shoppers and inner companions.

For the company we spoke with, the impacts of their COVID-19 digital transformation are nonetheless obvious and ongoing. The workforce is nearly completely distant or hybrid with solely a few workers working from the workplace full time. After seeing the efficiencies introduced on by upgrading to extra fashionable communication options, the company started making use of this digital mindset to different components of the enterprise – finally implementing AgentSync to automate producer license compliance. Because the begin of COVID, the company has doubled its worker headcount and loved larger revenues as a result of workers are capable of work when and the way they work finest, with the know-how to assist them do it.

Nobody will argue that COVID-19 was a “good factor” however it did present the motivation the insurance coverage business wanted to embrace some lengthy overdue modifications.

No matter the place you might be in your digital journey, AgentSync can assist you simplify producer license compliance, provider appointments, producer onboarding and offboarding, and extra. Get in touch with us today to find out how.