COVID-19 has dramatically affected every facet of the global market, including the insurance and insurtech industries. Some companies are experiencing a period of unprecedented interest and engagement they’ve never seen from their customers. Some are struggling to break through the noise surrounding the virus. Some are grappling with the consequences of legacy technology they’ve always acknowledged as a problem but resisted doing anything about.
Depending on size, business structure, product, location, and more, the challenges and opportunities facing insurers and insurtechs vary tremendously. There are, however, a few common threads.
These impacts have both long-term and short-term consequences
One commonality both the insurers and insurtechs which make it through this crisis can expect is the changes won’t end when the virus subsides. Working from home, making major purchases online, and communicating remotely will fundamentally change the way many individuals and companies work - and buy.
While some segments of the population, particularly younger demographics, were already skewing towards digital-first, personalized, more dynamic products, they didn’t seem quite ready to engage. The surge in first-time insurance buyers during COVID-19 indicates a renewed interest in insurance products, but not necessarily the traditional products previous consumers preferred.
Insurance products and services have been changing for a while now, and COVID-19 has only accelerated the pace. The insurers and insurtechs that make it through to the other side of this crisis will inevitably see changes in their business and their customers.
Insurers and COVID-19
As previously mentioned, there are many factors contributing to the specific impacts individual insurance companies will experience as a result of COVID-19. A few, more general consequences many players in the industry have and can expect include:
- Increased customer interest within the health and life sectors
- Decreased customer interest in the auto and home sectors
- Difficulty or delay in performing regular team functions and processes (especially if encumbered by legacy technology)
- Need to adjust products and services in response to changes in demand, resources, market, etc.
- Increased concern over cybersecurity
- Increasing claims within certain portions of the industry
- Concerns over rate-sensitive products and investments as well as fluctuations in the market
Insurtechs and COVID-19
As with insurers, many factors influence the specific situation individual insurtech companies find themselves in right now. More general consequences many players in the industry have and can expect include:
- For B2C insurtechs, many are experiencing increased customer interest and engagement
- For B2B and/or SaaS insurtechs, some may find enterprise customers are tightening their budgets and may be slower to engage
- Raising capital, at least in the short term, will be challenging for many
- Business models, as well as product offerings, may change and adjust to meet new immediate demand and long-term expectations
- A heavier reliance on digital going forwards will set many insurtechs up for success post COVID-19 (assuming they make it to the other side)
- Increased concern over cybersecurity
As the impacts of COVID-19 continue to make themselves known, insurers and insurtechs can certainly expect their businesses to be a part of that change. Many of the challenges today require a shift in thinking and way of doing things some may be uncomfortable with. However, this shouldn’t be allowed to interfere with making the changes necessary to take advantage of future opportunities in a post COVID-19 market.
If you have a topic you'd like us to cover, or you'd like to become a contributor, we'd love to hear from you! Please email our editorial team with an overview.