COVID-19 Triggers a Paradigm Shift in Technology for Insurance Industry

ABSTRACT

As the global economy grapples with the advent of novel coronavirus and its variants, the aftermath has left all industries with ongoing uncertainties and incalculable loss of life and livelihood in most countries worldwide. In such unpredictable situations, the insurance industry and governments worldwide have become the prominent source of optimism to sail through the situation. This applies to the insurance industry globally, which is currently in the grip of fear due to the COVID-19 outbreak and anticipating significant economic slowdown and hardship because insurance rides on the back of other Industries. Therefore, to overcome a few of the tenacious roadblocks due to the COVID outbreak, Insurers will be forced to reassess all aspects of their business life cycle and take necessary steps to continue operations with minimum disruption. Precisely, the impact of COVID on General Insurers and Life and Health Insurers varied depending on the lines of business, product lines, and a bouquet of benefits offered by the insurers. The pandemic has taken a hit on new gross written premiums on specific lines of business, such as medical, travel, commercial, and business insurance. Few lines of business such as motor and home have remained muted during the COVID timeframe. However, the claims volumes for personal insurance (e.g., motor) have significantly decreased due to the lockdown and travel restriction;the industry has witnessed the highest claims volumes in life and health compared to the past several decades. They say, "As every dark cloud has a silver lining,” it has given an opportunity to many insurers to develop new products (e.g., Pay Mile Auto insurance) and push toward greater productivity, i.e., digital capability across product range which will result in an elevated position to understand and address to the customer and intermediary self-service (such as Portals) and implicit and explicit needs. Notably, the Insurance industry is likely to lean toward offering personalized yet custom-made products and services, which are sharply focused on preventative care and embracing digitalization across the value chain. Besides enabling scalability and connectivity, insurers are strategically focused on digitizing the core of the business and cloud implementation;automation across the insurance value chain is necessary to compete successfully with new innovative product development or inclusive business models. Around the globe, the insurance industry is continuously putting a deep focus on revitalizing the technology paradigm to grow and strive to achieve cost-effectiveness amid emerging markets, rapidly changing economic conditions and stiff competition from Insurtech. According to industry experts across geographies, growth may be a balanced blend of preventative and protective approaches, with a gamut of new and improved services and products, and insurers are deeply fostering redefining service-oriented strategies and innovative products. © 2023, The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.