“Companies will need to modernize and optimize their current business while also looking to create their business for the future – one that aligns to a new mindset of buyers, risks, behaviors and expectations during and post COVID-19”, expressed Nilofer Sohail, AGM & Head Channel Strategy & Execution at EFU Life during an exclusive Q&A session with Daily NewsPK while discussing the impact of recent outbreak on insurance sector in Pakistan.
1. How do you imagine financial and insurance sectors post COVID-19?
COVID-19 is a 1-in-100 year event which has changed the future course of humanity in many ways. From a meltdown of global economies to how we interact socially, everything in between will never be the same for a long time. Post COVID-19, I imagine the insurance sector being impacted in various areas; customers behavior and their journey with us, distribution channels and their outreach, new products and emerging risks, enhanced use of technology for augmentation in all aspects of business, usage of data, and workplace reorganization especially increasing shift to work-from-home implementation.
Keeping in view the extended impact of social distancing, anything online, digital and allowing for remote contact with customers/partners/stakeholders will be in vogue. I also foresee a greater demand of clients for protection. Online payment solutions and platforms will be encouraged by insurers. In addition, there will be increasing focus on paperless environments, reduction of manual labor-intensive processes and their replacement with automated processes. Cost rationalization will be a major topic for some time to come, with focus on leaner (and more productive organizational structures). At the same time, shareholders view of their insurance companies will also be re-calibrated given the new normal of growth, expansion and profitability.
2. What are the challenges and opportunities for insurance industry in the current crisis?
As is said, every challenge brings with it some or more opportunities. And I believe that in this current challenge of COVID-19 globally the life insurance industry, amongst various other service industries, is at the forefront of this challenge; acting, reacting, innovating in ways we hadn’t imagined before. Companies will need to modernize and optimize their current business while also looking to create their business for the future – one that aligns to a new mindset of buyers, risks, behaviors and expectations during and post COVID-19.
Due to the general uncertainty surrounding COVID-19, potential and existing insurance clients have put investing in all sectors including the saving & insurance on a low priority. Layoffs, cost cutting, shutting down of businesses all have compounded the problem. This is an opportunity for the insurance sector to step up efforts for awareness creation about the social impact of insurance and the protection features it offers, in addition to the investment benefit. Probably customer timelines for insurance will shift from the long term (e.g. 10 years) to shorter terms (3 to 5 years) and provides an opportunity to design new products based on these emerging needs.
Insurance is an emotional people-to-people concept that relies heavily on personal selling. COVID-19 has disrupted this concept and with the lock-down and social distancing enforced for an extended time, sales via retail distribution channels (agency sales force, bancassurance) have taken a hit. Companies are already thinking on remote selling online methods but still trying to retain the emotional human element intact. This has created an opportunity to further invest in digital capabilities.
The lock-down situation and the continued social distancing approach has a large number of workforce unable to attend office full time, however their expertise and contribution is required by organization. This situation will have various companies make work-from-home a normal part of their business operations, resulting in cost rationalization, attracting talent which is available only part-time and reduce strain on office space.
3. What key actions did you take to stand by your customers and society?
As a socially responsible company, EFU Life has proactively responded to the challenges of Coronavirus and acted with a view to support our clients and partners in various ways.
We were the first insurance company to offer complimentary insurance for existing and new clients in addition to their contractual policy benefits. Digital insurance is one of our key strategic pillars and we have recently launched an online COVID-19 protection plan on our digital platform. Inclusive Insurance has been one of our Strategic Pillars and we are now making our partnerships with branchless banks, digital platforms and Commercial Banks to launch COVID-19 Insurance products so that a larger customer base can benefit out of this. To facilitate our clients the grace period for premium payments has been extended from the usual 30 days to 75 days. Ease of documentation for claims and digitalization of processes and documentation is also in process. We are also expanding client contact points for maximum facilitation. For awareness creation, we have been on the forefront and have utilized our digital and social media platforms to the fullest for this purpose. We have ensured that our business operations run smoothly with work-from-home protocols in place. EFU Life is also supporting the health and social welfare organizations in this testing time.
4. How do you see consumer behavior shifting towards digital during this crisis time and what is your approach while understanding and responding to their needs?
Definitely, in this situation, we have seen an increasing usage of digital services by consumers in the financial sector, such as banks. In insurance, as I mentioned earlier, selling is predominantly done via face-to-face contact and thus digital insurance sales has a very small proportion. However the new reality is that anything digital has to made a serious part of an insurer strategy going forward and this includes digital sales, customer service, front and back end processes, as well as payments.
At EFU Life, we have a multi-faceted approach to digitalization. Our digital online sales channel, BuyNow is fully functional with the latest addition of COVID-19 Protect, an insurance product specially designed for the current situation and easily available online. We have partnered with various organizations to offer Digital Insurance Products through their Platform. Digital insurance policy documents as well as online claims intimation are areas we are working on to respond to client needs. Additionally we are encouraging usage of online digital channels for insurance premium payments, such as debit/credit cards, IBFT, branchless banks, so that reliance on physical payment instruments is reduced. Similarly, for claims disbursement as well, digital modes are being used. We are using all possible Digital Claim Payment methods such transfer to the bank account of any commercial bank operating in Pakistan, all mobile wallets and also to the customer CNIC. For client communication and interaction, our digital channels are open, including our Chatbot on facebook.
5. In your opinion, how InsurTechs can help insurance sector to cope up with current crisis scenario?
In my opinion, Pakistan has all the relevant ingredients to offer for an InsurTech to grow and prosper i.e. large population, youth dominated, high penetration of smartphones and usage of 3G/4G Technology. InsurTechs can leverage their digital capabilities to communicate with customers at various contact points to increase the overall insurance awareness and specifically about COVID-19 and understand their needs. There are lot of international learnings available for the InsurTechs which provides InsureTechs to take heed and step up to the challenge. The key will be to remain patient and take a step by step approach.
In the end I would like to reiterate EFU Life’s commitment to its employees, clients, partners and stakeholders in these unprecedented times. I firmly believe that this difficult time has provided us as an industry great opportunities to step back and reassess our business models and I am confident that we will emerge out of this challenge better equipped to face the potentially new normal and challenges of future.
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