How technology is instilling trust in insurance post-virus


The coronavirus pandemic presented the insurance industry with an opportunity to reinforce its relevance and critical purpose in society.

At that critical moment, the industry had to demonstrate the purpose of insurance by supporting the affected individuals and businesses through quick turn-around times on claims settlement thereby positively impacting a quick global economic recovery.

Notably, at the advent of the crisis, most policies had generally excluded pandemics. The insurers were tested beyond limits, with most of them paying pandemic-related claims on ex-gratia basis.

Through a concerted effort, the world pharmaceutical organisations went into overdrive to develop and deploy Covid-19 vaccines with the intention of flatenning the infections curve.

In 2021, the world saw a widespread vaccine deployment and a general easing of pandemic-related restrictions. The availability of vaccines acted as a catalyst for rebuilding confidence among people and businesses while refuelling economic recovery.

Progressively, the anticipated recovery and additional innovative digital distribution channels will have a positive impact on insurers as most intend to leverage the post-pandemic period to innovate resonant insurance solutions. However, a lot will depend on how effectively the industry adapts to emerging technology and generational needs.

At a more fundamental level, there is also a need to boost stakeholder trust in the insurance industry to enhance retention and profitability. This might be achieved in part through greater transparency in how insurers collect and utilise personal data.

The newly enacted Data Protection Act has drawn a special attention to how businesses utilise and manage their client information.

In the post-pandemic era, insurers have become more proactive in seeking comprehensive solutions to solve societal problems by mitigating financial impact of future pandemics and closing coverage gaps for natural catastrophes.

While at it, insurers must aggressively communicate insurance matters frequently and consistently through multiple channels. This is because it is difficult to overestimate the value of communication in a crisis such as the Covid-19 pandemic.

Specialised niche insurance products are seeing substantial growth because of lessons learnt during the pandemic. Many traditional products suffered major setbacks as the existing exclusions within insurance policies had negative traction from customers hence impacting the extended business environment.

On travel insurance, the Black Swan Covid-19 crisis has demonstrated the impact of major catastrophes on international and business travel, which had a multi-sectoral impact.

The crisis has also accelerated the trend toward automation and digitisation, both of which were previously fuelled by changing demographics, customer expectations, and competitive pressures. Customers now expect their 'best digital experience' to be the norm, regardless of the industry.

That means that insurers are no longer competing against themselves, but against the wide range of digital customer experience needs and product accessibility channels.

With the existing digital competition in the markets, customers have become increasingly informed and willing to reconsider their insurance options in a rapid and unpredictable manner.

Having been forced to make other product purchases online, customers have become increasingly comfortable with buying products virtually. The new or more digital-savvy customers will naturally be drawn to those companies with the best digital offering.

The increased transformation and uptake in the financial services sector has equally and greatly played a role in increasing the level of trust in financial products, insurance included.

Insurance players can leverage this post-pandemic period to take stock of lessons learnt to shape the development of future products that have more flexibility and well-defined coverages with minimal exclusions.

Insurers must quickly consider supporting and putting in place systems that digitally process and dispense claims at the click of a button to enhance trust with their customers hence providing a “wow” effect on their experience.

While insurers need to focus on meeting customer and stakeholder needs in the aftermath of the pandemic, they can’t afford to lose sight of long-term commercial opportunities and their role in facilitating a wider economic recovery.

This calls upon innovative insurers to bring forth products that make sense for the common mwananchi, presenting them an opportunity to access affordable insurance products. An example of a flexible and ideal product in the market today is the Laser Insurance Brokers’ Flexi Maisha Cover.

The policy targets SMEs and individuals that ordinarily would not go for the traditional group life product or are uncomfortable with monthly payments that run for years on end.

A positive and decisive response from insurers can permanently reshape perceptions, cement customer loyalty, and build trust in the industry despite the lingering concerns about Covid-19 variants.

Muracha is the Executive Director of Laser Insurance Brokers (LIB)