Since its humble beginnings in the 1700s, the U.K. insurance industry has grown to manage over GBP1.7 trillion in investments under the Association of British Insurers (ABI). Employing over 300,000 workers, this industry is the largest in Europe, which is now being threatened by the conditions imposed by COVID-19 restrictions and social distancing measures. Previously challenged by Brexit, the U.K.’s position as a top-performing hub for insurance services has already been impacted by IT failures and security breaches. So what will the insurance industry look like following the pandemic? Let’s take a look at the ways.
Non-Essential Businesses Are Under Fire
To prevent the spread of the Coronavirus, establishments such as restaurants, pubs, hotels, and gyms have been forced to remain closed across the country. Despite the existence of business interruption insurance, thousands have found that their existing coverage is not enough to shoulder financial losses. As such, businesses without other options have accused the insurance industry of wrongfully selling policies and are demanding them to be retroactively amended.
As the insurance industry’s reputation remains tarnished, it is up to them to restore consumer confidence, especially as economic damages continue to spread like wildfire. As a significant recession moves to shrink the economy, it may be difficult for insurance companies to expand their revenue, which will also lead to a fall in the demand for services.
Can We Expect a Brighter Future?
To return to business as usual, it’s up to insurance companies to adopt new strategies that prioritise restructuring the use of technology and build more efficient savings. As much as it isn’t favoured, this bloated industry must consider downsizing to quickly reduce expenses. To decide who gets laid off, businesses must realign company portfolios and decide which parts of their business are driving the most value.
If sales teams, for example, are failing to exploit digital sales to their full potential, establishments may have to return to manual processes, which may take even longer considering today’s remote working conditions.
Relying on Technology to Recover
However, companies must transform themselves digitally to keep up with the current landscape. The process is necessary but undoubtedly expensive and will rely on buy-ins from employees and senior management. These efforts may be stunted by a lack of available talent as other industries continue to turn to technological advances to drive growth. Thus, the skilled people available to do so are short in supply.
If the insurance industry can leverage the right kind of technology and re-establish consumer trust in their offerings, their future is likely to be a positive and promising one. By continuing to reassure the protection of failing businesses, the insurance industry can remain a key player in the overall recovery of the U.K. economy.
To learn more about the current state of the insurance industry and what to expect soon, keep up with events shared on Insurance Wire. Through our business and economy section, your small or medium business can make more informed decisions regarding how to proceed during changing times.