Insurance Predictions noted B.C.- that's long ago, you know, Before Covid

It's mid-COVID-19 (wild that an outbreak is now a measure of time) and Matteo Carbone has re-engaged after shut-in with a challenge-

How have your InsurTech/insurance predictions held?

Matteo threw down the gauntlet with his recounting of health insurance guidance or discussions over the past several years, and included some actual today versus 2013 results. I purposefully have not been that bold in specific future actions but did continue my discussion in early 2019 of insurance tendencies that would continue.

In response to my good friend Matteo's request, here are my 'what will continues' and how those look mid 2020/mid COVID:

1.      Customer knowledge about insurance in general will remain low. Not because they don’t want to know, but because they don’t need to (from their perspective.)

• All that is needed to be said here- business interruption cover. Knowledge was low, but need to know- very high. That won’t happen again (new demands for cover, new approaches)

2.      How insurance is purchased will -in the majority- remain the same. Sure, digital sales will increase, who it’s purchased from may change (agency changes), but since customer retention remains at a high rate a significant sea change is not to be. It’s a pain to change how you deal with a product that many would rather not have.

• Yep.

3.      The public’s motivation to have insurance will remain low – customers still have trouble understanding its worth and accepting its cost.

• See item 1.

4.      Insurance innovation (InsurTech) will continue to capture the bulk of discussion within the industry and will remain generally unrecognized by the buying public.

• InsurTech players’ survival is now the bulk of the discussion. The shining stars that rise from the ashes of COVID-19 will be the next discussion.

5.      Insurance will remain a ‘sold by price’, represented as commodity product. Just can’t seem to get past that.

• For commercial products, see item 1. For motor/auto- the tide may be changing to selling by effective use of vehicles (not UBI or on-demand, but some pricing recognition changes prompted by reductions in use, rebates by carriers, and new expectations by customers.

6.      Net promoter score will remain the primary measure of insurance company service success. Measuring the outlook of a minority of customers (those who experience claims) will remain the means to benchmark claim organizations’ effectiveness.

• Net Promoter what? Empathy and pricing effects are the new KPIs. Loyalty is suspended during the post-COVID period

7.      Large carriers will continue to measure staff efficiency and effectiveness through file reviews and reinspection/damage evaluation, aggregating review data but not leveraging those data well in meaningful training efforts.

• Quantitative reviews are also under suspension- frequency and severity management have suffered a blow under COVID era claim inspection changes. Virtual and alternative methods of inspection have roiled the QA waters.

8.      Agents will still sweat loss ratios at year’s end.

• Agents are like everyone else in the industry- sweating daily operations. Loss ratios will exist but mostly as a verification of being in business with a book of clients.

9.      Unstructured data will still be received in large volume by carriers, and managing it in terms of access, utility, and predictive worth will be a working goal for the year. Again.

• The health insurance world might escape some of this problem with telehealth, but the volume and complexity of health claims for the year will keep unstructured data on the marquee of insurance coming attractions.

10.  The carriers who have established reputations for excellent service will continue to satisfy their customers. Carriers who have not will continue to not really know why.

• This will hinge on how well a respective carrier has engaged staff in adapting to change and unique ways of serving customers.

The obvious was itemized (and there were many more things that could have been added). As a colleague is wont to state, many of these qualify as ‘No kidding Sherlock’ issues (substitute other words for ‘No kidding’.) The point is-these points still reach back to customer education and service, both internal and external in nature. These issues will change a little each year, get a new perspective when systemic risk events occur (and they will) but will never disappear, and accordingly the need to be aware of them- and focus on them- will help any insurance organization better serve its customers. 

Innovation must come from a recognition that its purpose is to facilitate what is still primarily analog- customer service. As for the coverage gaps that have been identified in stark magnitude- the industry needs to start work on solutions now. Pandemics will occur again. Here's a prediction- programs like the proposed Ten C's Project will gain in application- what happened for COVID-19 simply cannot be afforded again.

The Insurance Elephant predicts with high reliability that customer service will remain a key aspect of insurance for 2020, along with it's close partner, empathy. It’s low lying fruit for the Beast- along with having affordable products service and empathy are keys to insurance success.