Is Covid-19 a Wake Up Call for InsurTechs?
Like most businesses across multiple sectors, insurance companies and insurtechs have been affected by the impact and effects of the ongoing Covid-19 pandemic. However, here’s the silver lining: insurtechs with their ability to offer different kinds of contactless, paperless solutions can actually use this time to innovate and present the world with products that can help end-users tide over the crisis.
The current Covid-19 pandemic might actually be a hidden opportunity for the entire insurance sector, just like it has proved to offer the contactless payments market more opportunity.
Read More: The Rise of Contactless Payments
Research shows that more than 70% of customers understand the importance of having their life and possessions insured. But not many people act on this urgency.
An Opportunity in Waiting
Medical studies and reports have suggested that the world was ill-prepared for a pandemic like the Covid-19. While economies and businesses work on strengthening their reopening strategies, insurtechs can play an important role. Insurance companies are meant to protect individuals and businesses from risks and are themselves vulnerable to sudden market changes. The introduction of a new pandemic and its effects requires companies to update their polices and standards to help protect the interests of businesses and individuals.
While on the one hand the ongoing pandemic is a time for insurance companies to increase their base of offerings, it is also a time for providers to boost their paperless formalities so that users can easily acquire any kind of policy or cover that they need, with reduced paperwork. Adapting to this new reality will allow the most innovative insurtechs to hone in to a potentially large customer base that is already being affected by the effects of Covid-19.
A Renewed Focus on Going Mobile
While insurance providers and insurtechs can experience a significant boost in demand for their services and products, besides updating their covers and paperless methodologies, now is the time for insurtechs to foster a better mobile customer experience. With countries going into lockdown mode the last three months with only few showing signs of opening up and restarting their economies, the best way for insurtechs to capitalize on this time is by offering more digital channels and mobile facilities through which customers can acquire the kind of risk protection policies that they seek.
A secure and successful customer engagement experience throughout the Covid-19 pandemic has largely depended on digital channels, with mobile being at the forefront.
Even prior to the spread of Covid-19 pandemic, customers were already showing an increased adoption rate for mobile technologies, mobile payments and digital banking facilities.
Insurtechs that can ensure that their products and offerings are easily accessible via mobile apps allowing users to buy and manage their policies, will have an edge in the marketplace during this time and more so as economies go into unlock mode.
Insurtechs who do not adapt to this changing mindset and need might not be able to cope in the post-Covid-19 era where social distancing will still largely need to be followed thereby instilling a continued need for paperless transactions and mobile insurance purchases.
Should InsurTechs look at the Current Covid-19 impact as a threat?
Given the changing lifestyles, evolving economic needs and what individual users need more of today, insurtechs have a wide arena within which to innovate their service offering and meet customers halfway.
As the need for last minute policies rise during this time, agile teams that can meet these needs will be able to win more customers during this challenging time.
A few ways that insurtechs will have to keep up pace with the evolving business and individual level needs besides contactless payment options is faster claim and policy processing features. Even though insurtech investments dipped in the first quarter of 2020, there has been significant activity in early-stage funding within the segment.
While insurtech startups will have to use this time to also address liquidity issues and meet workforce and operational disruptions, the ones who focus on offering digital transformation needs will thrive better through the pandemic.
One way to do this could also involve collaboration with more mature insurtechs or third-party integrations. This will also help keep the required pace of innovation.
Insurtechs have an advantage in that they can actually enable larger insurance companies tide over the crisis with the right supporting technological capabilities. So in all, the future seems bright for Insurtech.