Challenges for the insurance industry in the era of the “New Normal”.

Cath Sandoval
Copywritter

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COVID-19 changed everything. We are currently facing a new scenario that may seem scary and complicated, but with the right tools, the insurance industry can move forward.

In this article, we will summarize the most important milestones of our webinar Challenges for the insurance industry in the era of the “new normal” presented by our CEO, Gino Bustamante.

What has the pandemic left us?

Among other things…

  • Deaths
  • High debts due to hospitalizations
  • Unemployment
  • And an economic crisis

Post COVID-19 world economy

When it comes to insurance, there are four aspects in which the industry could be affected by the global economic crisis:

  • Drop in demand.
  • Cancellations.
  • Renegotiations.
  • Non-Payment.

How can we better connect with people under this challenging scenario? With technology!

The 5 current technology trends

01. Blockchain

It is a chain of unmodifiable blocks that are cryptographically secured. This means that all data stored through an operation or transaction on the network are recorded in a secure and unalterable way.

The possibilities of the Blockchain are unlimited, but for us these are the most relevant:

  1. Confidentiality: Encryption ensures that people have peace of mind that their data is secure, which is especially important in the healthcare industry. 
  1. Cost Reduction: The insurer will need less time and people to verify the information provided by customers. 
  1. Streamlining: Carriers can give their customers real-time responses when making a claim.
  1. Smart Contracts: This technology ensures that the insurance company complies with the clauses set forth in the smart contract.

02. Decentralization

Here comes a critical point known as web 3.0, a new type of internet service built using Blockchain. 

Web 3.0 is a collection of applications and user interactions on a decentralized, highly interoperable platform and facilitates sharing and communication.

Web 3.0 is the basis for people to create, buy and sell products.

Some benefits of decentralized insurance

  1. Allows the purchase and sale of products to be more efficient.
  2. Guarantees low operating costs.
  3. People can share the risks.

03. Internet of Things (IoT)

This technology allows insurers to deepen, expand and enrich their knowledge of the environment (risks and opportunities) and their clients (preferences and behavioral patterns).

All the information gathered by this technology makes it possible:

  1. Fraud Preventions: Carriers will increase their capacity to better fraud detection and control.
  1. Proactively manage risk: Allows to anticipate possible incidents, breakdowns or claims, reducing the associated repair costs.
  2. Adaptable Premium: the value of the premium may be associated with healthy lifestyle habits.
  3. Pay per Use: In automobile insurance, IoT makes it possible to generate customized premiums according to usage or type of driving.

04. Hyperfocalization

Thanks to Big Data we can now offer more targeted services than ever before and at the same time deliver great value to people.

It’s a win-win situation

Personalizing, segmenting and pricing products accurately benefits insurance companies and customers.

The insurer has the ability to analyze and tailor products, which helps to price dynamically and in a personalized way.

Policyholders are increasingly open to commercial proposals that are innovative and “tailor-made.” 

05. Partnerships

We see that the value chain of carriers is fragmenting as partners or insurtechs can bring speed to improve the service they deliver to their policyholders more efficiently.

Where can they contribute?

  • Subscription.
  • Fraud detection.
  • Claims.
  • Underwriting.

However, none of this is enough if we don’t put our customers at the center, but why?

The pandemic has shown that users trust companies/brands with values, and purpose, putting them at the center.

In this sense, people expect a high degree of empathy and consideration from their insurance companies. They want to be taken into account and feel supported, especially in difficult and vulnerable moments that require an insurance policy’s activation. 

Insurers that decide to focus their strategy on their customers should take advantage of the opportunities offered by technology to guarantee empathetic and human support throughout the value chain.

Access our webinar by clicking here.

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