Will there be a long-term systemic change in the insurance industry

We have been bombarded by comments and opinions on the immediate and medium-term impact of COVID-19, especially around operational issues and sustainability measures.

It is very difficult, if not impossible to start tracking the actual impact of COVID-19 on the global and local economy. Now I am no "futurist", "trend spotter" or prophet, for that matter. I am a realist, a technocrat and researcher. All I can do is look at facts, what we know about past behaviour and current impacts, which will be difficult to do, as can be seen below.

Firstly, there will be a lag on whatever reactions we experience. Then there is the downgrade, the oil war, the US/China trade war etc. Maybe, the question is not what effect will COVID-19 and the lockdown have on systemic behaviour, but what effect this period of societal experience will have on long term behaviour.

Below are several influencing factors, amongst others:

• Being told that you are having to give up personal freedom for several weeks
• Being told that you are not allowed to earn a living to feed yourself and your family
• Being unable to honour your financial obligations despite the fact that you have been diligent in this regard, up till now
• Spending several weeks in close relation with your family or in solitary isolation
• Being completely unable to change any of the above factors, regardless of you position/status/class in society or business
• Being bombarded by depressing news about numbers infected, numbers in ICU, numbers deceased and then the alarming feedback on a failing economy
• Having money but being unable to spend it on what you are used to, having the experiences you are used to or travel where you want to

Will people all of a sudden change behaviours learnt over decades, will societies simply forget the systemic behaviours shaped over generations?

We were built to forget.

"Forgetting is necessary. It allows us to experience the world more fully and immediately. It helps us manage the painful events in our lives. And it encourages us to remember what’s important" Psychology Today

It is because of a need for food, and the fact that we forgot the detail as to how uncle Tom was killed by a lion that allowed us to leave the cave again. It is because we are able to erase details of a gruesome accident from our minds that we are able to drive again. Being unable to forget could lead to maladaptive behaviours, which negatively impacts our functioning.

Past financial crisis illustrates the above to me. Rebuilding and going back to old patterns have occurred every time. In the short term people may be hoarding a bit of cash or increase savings or decrease debt, but learnt spending and lifestyle patterns come back soon.

Suggested view

I would rather suggest that we look at new skills developed, new comfort zones found and past comfort zones successfully overcome during this period. These could be things such as:

• Families developing comfortable remote group family gatherings
• Parents and kids embracing closer family activities such as cooking together and playing indoor games more often
• Business owners getting a better grip to precise financial matters in their businesses (such as income and expense patterns)
• Business managers developing new management techniques and exiting comfort zones regarding remote working staff
• Staff settling into remote working patterns and managing projects in remote working groups
• Families evaluating their personal finances closer. Evaluating what is important and what not in their spending
• Comfort in online shopping and planning shopping outings
• Etc

If we can determine which of these are most likely to stick with what percentage of society/ business, we can start identifying aspects in business or society that will be effected in the longer term.

Personally, I believe that at this stage the only systemic behavioural change I can confidently identify is the shift to online shopping and buying being sped up. This has already been going on and will simply accelerate at a quicker pace.

We have a window of opportunity, before old patterns settle back in, to address the needs of clients which we can now address and which we would like them to maintain long term. These will mostly be nothing new in our business.

"It will mostly be strategies we have already identified before the crisis, but which we were hesitant to implement because we/ our staff/ investors/ clients were not quite ready for yet".

They might just be ready for long term, systemic change with these strategies and we have a window of opportunity.

If you are interested in sharing in a conversation I will be having with a few people who are well versed in several of the above issues and experienced in developing long term strategies, join me at 16h00 on the 28th of April for 90 minutes of fascinating exploration in a free webinar.

Long-term Strategic Impact