Comment & Analysis

A brand new insurance world

The City of London used to be bustling with brokers and insurers looking to strike a deal; a buzzing hub for the UK’s insurance industry.

Now, it is a ghost town.

The Covid-19 pandemic has transformed professional industries, forcing nearly everyone to work from home almost overnight.

Some industries were better equipped than others to deal with this change in work culture. The insurance was somewhat caught off guard.

While working from home was not necessarily the standard for most brokers and insurers, they soon adapted.

And in a dramatic and unprecedented acceleration of technology adoption, the insurance industry is now well placed to tackle the remote world.

Initial shockwaves

The national lockdown hurt some insurers more than others. Some had already begun investing in remote working before the pandemic, while others were playing catch up.

Hindsight is a funny thing, as most organisations wouldn’t have expected to be working from home for the length of time they have been. 

Hindsight shows that short-term changes would not suffice. 

For many companies, working from home for the first time presented serious infrastructural challenges that needed to be addressed.

Therefore, the initial period was a time of ensuring resilience. Businesses had to ensure the VPN network, or whatever channel they used for remote working, could continue to operate at full capacity so that clients were able to be serviced. 

While challenges surrounding data protection and cybersecurity remain, network resilience did improve.

Planning in uncertain times

The next six-18 months remain as uncertain as the last. Conversations are ongoing in the insurance industry about what the new normal will look like. Operating models have been turned upside down.

Businesses now have a better understanding of the benefits and negatives of remote working; this will help in terms of mapping out what the industry could look like. Businesses that succeed will be those who adapt best to the ‘new normal’.

But what will the ‘new normal’ look like? 

Organisations continue to anticipate what the world will look like post-Covid-19 but no-one truly knows. It’s widely anticipated that some form of flexible working will be commonplace even when offices are allowed to fully open. 

Therefore, most brokers and insurers may have to rethink their five-year plan.

A customer-centric approach 

Ultimately, if a customer is happy to continue to work through virtual channels, there’s no need to return to the office. 

Most individual and small customers don’t ever meet their insurers in person.

However, large complex, commercial risks have traditionally been transacted in person. Lloyd’s of London has traditionally been the hub of face-to-face interaction. 

The future workplace is going to be “hybrid”. Most businesses recognise there are periods where people will need to come in to innovate and co-create. Some employees may not have suitable conditions at home to work, depending on their home living situation. But the 9-to-5 way of working would most certainly be a thing of the past.

It is likely that the way insurers define their future operating model will be significantly influenced by how their customers want to interact. 

Although the future is uncertain, insurance businesses should begin to anticipate what change will look like, and what they will have to do to continue to meet customer’s needs.

Welcome to the 21st century

Insurance companies have, admittedly, been slow to move towards newer ways of working. The industry was slow to digitise and, when it most mattered, caught flat-footed.

Technology adoption has accelerated at an unprecedented scale over the past 6 months. Many companies may never have dreamed about a hybrid, remote working model. 

What’s clear is the industry will not be the same once the pandemic has passed. For better or worse, the insurance industry is up for a shakeup.

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