“The Insurance industry has generally been a laggard in adopting new technologies and business models”, commented Nomaan bin Bashir, General Manager – Head of Consumer Insurance, IGI General Insurance, during an exclusive Q&A session with our Editor-in-Chief and expressed his point of view on the impact of COVID-19 outbreak on the insurance industry in Pakistan.
1. How do you imagine insurance sector post COVID-19?
COVID-19 is a wake-up call for all those companies in the Insurance Industry who have not graduated their business models to take into account the changing market conditions and demographic profiles of the future insurance buyers. For years customers in different markets around the world have been pushing the Insurance Industry to move from a “once in a year engagement” to a more frequent and transparent customer interaction. I believe, COVID-19 has majorly reversed the traditional way of engagement to one where customers will demand insurance services to be offered remotely with minimal social interaction. The digital solutions and remote servicing will lead the next phase of business transformation in the Insurance Industry – what we call #thenewnormal.
2. What are the challenges and opportunities for insurance industry in the current crisis?
I foresee that Insurers will be impacted across the full spectrum of their day to day business activities. In particular, the Insurers will experience a high level of stress on product pricing of various lines of business. Some retail insurances like Travel will see sales taking a nosedive; while some commercial insurances like Directors & Officers Liability may see an increase in demand with more strain on the risk assessments.
COVID-19 has highlighted the less than desirable customer experiences due to manual paper-based processes, non-digital policy and claims transactions and availability of standard vanilla flavoured products. I also see a substantial skill gap in the Industry to execute strategies fit for this #newnormal. More importantly, the leaders in the industry seemingly lack the will to take bold actions needed for the changing circumstances – an “if it works why break it” philosophy.
3. What key actions did you make to stand by your customers and society?
At IGI Holdings, COVID-19 brought out the best in the capabilities of all of us as a team. The company switched over to a remote working environment, almost seamlessly. We ensured that our communication with our customers regarding our products and services was further increased. IGI Life Vitality reached out to all its customers informing them that the policies covered COVID-19 risk. In case of some distributions, the product coverage limits were enhanced in case a customer was affected by COVID-19. IGI Drive, our Telematics Division, kept operating 24/7/365 without a single minute of downtime – all remotely. Our security services supporting IGI Drive operations were able to address all crises situations without fail.
4. How do you see consumer behaviour shifting towards digital during this crisis time? What is your approach while understanding and responding to their needs?
COVID-19 pandemic has suddenly fast forwarded us all into the future where digital interactions have unexpectedly taken the centre stage. The crises has placed a strain both on organisations and their customers to get on a fast learning curve to interact remotely. The digital channels have become a primary engagement model in this new world today. This changed model requires the organisations to be agile in order to support its customers. Extended lock-downs and the inability to commute in order to get desired services, has inadvertently made consumers demand a digital experience.
The customers have started to ask for digital policies, online payment solutions, offline claim settlements, and remote interactions with relationship managers. The insurance companies in Pakistan, generally have been lacking the Tech infrastructures and solutions to rise to this unexpected challenge. This is the right time for the companies to reinvent their business models to the core and induct digital processes and solutions to support their customers.
At IGI Holdings, all our businesses have taken the lead in addressing the changing market needs. From online motor and life policies, to online status of policies to facilitating key distributions for remote policy issuance, the businesses have adapted to the new business model. Our remote work environment and ability to service customers 24/7/365 is another evidence to reflect the company’s resolve to be agile and be digital ready.
5. In your opinion, how InsurTechs can help insurance sector to cope up with current crisis scenario?
InsurTechs are companies using technology to build solutions for creating efficiencies in the Insurance Industry value chain. The Insurance Industry has been well impacted with the COVID-19 pandemic and the requirement to go fully digital has unexpectedly gone up the priority list. I believe that the InsurTech companies hold the required skill-set that is missing in the Insurance Industry today to execute this change. InsurTech companies have primarily focused on building capabilities in product and distribution related solutions for the insurance companies – areas that undoubtedly hold a lot of growth potential for the Insurers today. Some InsurTech companies also offer end-to-end digital platforms that are product specific. These solutions allow the Insurers to fast track system enhancements while focusing on their core business – selling policies and servicing the customers.
