The coronavirus crisis has been the driving force behind the insurance industry's digital transformation. The adoption of technologies such as video-operation and telemedicine, the growing importance of cyber-risk policies and the offer of on-demand insurance are some of the trends that will continue to grow. 

Digital, personalised and health-focused: insurance's new normal

Photo: 2020 has advanced the digitalisation of insurance by leaps and bounds. Credit: Mailchimp | Unsplash

By Daniela Perdomo Martínez

During the months spent in lockdown, many policyholders never received a visit from a claims adjuster after a claim: the damage assessment was only carried out via a screen. Others have become accustomed to talking to their GP, nutritionist or psychologist via an online consultation in recent months. Meanwhile, some employers have become aware of the virtual threats of teleworking and have protected their staff with a cyber-risk policy.    

The coronavirus crisis (COVID-19) has forced both policyholders and insurers to be more digital than ever to adapt quickly to the new situation. The pandemic has accelerated major insurance innovation trends that are transforming the industry.  

New digital channels 

Policyholders are increasingly demanding new ways of contacting their company. According to Capgemini's World Insurance Report 2020, 79% of customers prefer to take out a policy online and 75% would be willing to switch insurers if they didn't offer a comprehensive service to manage their policy through a variety of channels. Insurers are aware of these demands and 80% are prepared to invest more in digital channels, according to the report. 

The pandemic has led to these channels becoming more popular, not only for taking out or managing a policy, but also for providing expert opinions. Some companies were already offering video-operating services to avoid face-to-face visits before the crisis, and their use has skyrocketed as a result of the pandemic: AXA's telemonitoring increased by 220% in the first five months of 2020. Meanwhile, Grupo Catalana de Occidente was already analysing the benefits of video-operating before the crisis as a possible service and adopted it very quickly. As a result, 37 per cent of the appraisals in its various lines of business were conducted virtually during the two months of lockdown. 

In order to adapt their processes, some insurers are turning to insurtech start-ups which offer specific technology, such as the Spanish company Bdeo, which combines artificial intelligence, blockchain and video calls to manage claims remotely. Its technology was available before the pandemic began and, in fact, it was already collaborating with companies such as Mutua Madrileña to manage household claims or BBVA Mexico for its car insurance. When the crisis hit, it decided to offer its services free of charge to insurance companies and loss adjusters. Recently, the company has stated that most of them continue to use its services. 

As well as being used to carry out assessments, video calls have also allowed policyholders to stay close to their relatives during the pandemic. "We had elderly people in care homes who were confined and there was a risk that they might feel lonely," said Santalucía CEO Andrés Romero in an interview with MIT Technology Review in Spanish. "Contact with your loved ones is a necessity and video call technology has become a lifesaver for these communities," he adds. 

Nevertheless, the boom in video calls in the insurance sector doesn't mean that the physical channel is going to disappear. "The pandemic has made it necessary not to go to insurers' offices in person, thus encouraging new digital channels, but customers will want to get back in touch with people," says Elena Rodríguez, head of Open Innovation and Innovation Ecosystems. In this way, policyholders will be looking for an omnichannel experience, although, for the time being, the digital aspect will be the protagonist due to the current circumstances. 

Remote medicine without leaving the house 

As a result of the pandemic, the saturation of the public health system has turned health insurance into an alternative. Proof of this is that the demand for these policies has grown by 5% during 2020, according to data from the Cooperative Research among Insurance Companies (ICEA). In addition, to avoid having to visit health centres in person, the demand for digital services has increased. A recent Cigna survey shows that users' interest in remote medicine has increased: 60% say they are interested in virtual health services. 

To address these needs, some insurers have strengthened their existing remote medicine services and others have started to offer them. As a result, the vast majority have integrated remote medicine into their service portfolio. These include Sanitas, which offers video consultation services in most medical specialties; MAPFRE, which uses the Savia digital health services platform that includes video calls and chats; and Asisa, which reinforced all its digital channels in response to the pandemic, such as its virtual doctor and its medical channel. 

"Telemedicine has many benefits, such as reducing costs and waiting lists, so it is a trend that is here to stay," says Rodríguez. However, the expert believes that it will be the younger generations who will continue to make the most use of this technology when the pandemic is over. 

It all points to the search for an integral experience where the coexistence of the physical and digital channels will be the most important thing

Photo: It all points to the search for an integral experience where the coexistence of the physical and digital channels will be the most important thing. Credit: Dylan Ferreira | Unsplash

Protection against cyber-attacks 

The massive use of the internet during the crisis has directly influenced the cybersecurity landscape. A report by the National Cryptologic Centre warned a few months ago that the pandemic and teleworking have favoured the exploitation of systems exposed to the internet. 

To protect themselves against cyber attackers, many companies have opted to take out cyber risk insurance. A study published by the risk management company Aon, in which several insurers participated, indicates that the number of contracts for this type of policy increased by 41% during the two months of the state of emergency. 

Some companies have taken specific measures during the pandemic in order to help their customers. For example, at the beginning of the state of emergency, the Catalana de Occidente Group extended the preventive services of its cyber-risk insurance for the self-employed and SMEs free of charge, and Bankia launched a campaign aimed at helping these same groups protect themselves against data theft or business interruption. 

The National Cryptologic Centre foresees that companies will have to manage the security of a growing number of connected devices, so everything points to the fact that the supply and demand for cyber risk insurance will continue to increase. According to Rodríguez, "this type of product will be a trend from now on". 

Customisation: insurance on demand and pay-as-you-go  

Today's consumers are used to paying for what they use and buying customised products. Although this trend is not a product of the crisis, it has been boosted by it: for example, the demand for subscription-based video streaming platforms has soared in recent months. Insurance has not escaped this trend. According to the World Insurance Report, more than 50% of people want pay-as-you-go insurance, as it allows them to calculate their premiums in a personalised way and make the price more rational. 

To protect themselves against cyber attackers, many companies have opted to take out cyber risk insurance

Photo: To protect themselves against cyber attackers, many companies have opted to take out cyber risk insurance. Credit: Lianhao Qu | Unsplash

Zurich is one insurer that has understood this need and as a result offers Klinc, an on-demand insurance policy that covers damage to electronic devices. Meanwhile, the car insurance company Hello Auto offers its customers to pay according to the way they use their vehicle and the insurtech Lisa Seguros offers personalised, online and on-demand insurance to companies and professionals thanks to automation.  

Rodríguez believes that "hyper-personalisation is not a simple model, because it considerably increases the processes" for insurers, but he predicts that they will increasingly opt to offer on-demand insurance in certain areas, such as health, travel and mobility.  

We will be increasingly accustomed to registering and cancelling insurance whenever we want via an app, to medical consultations being done via a screen or to protecting ourselves against virtual threats with a cyber-policy. The pandemic has put the pedal on the accelerator of some of these habits, demonstrating how technology and innovation are helping the insurance industry to satisfy new customers and move into the future. 

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