COVID-19 caused a major economic shock. Like any other industry, the insurance industry took a major hit. They had to work harder than before. With most businesses closing down and mass layoffs, there were more policy cancellations and claims than before. Their operational activities also slowed down as they relied on face-to-face meetings and paperwork to be able to serve their customers efficiently.
With the major financial hit on businesses, most of them expected to be compensated for business interruption even though the pandemic was not inclusive in the coverage. Most people were under medical care and there were multiple deaths. The life and health insurance sector had to compensate most of their clients.
With increased number of claims, the industry struggled to deliver at the time it was needed the most. This was also a critical time for the insurance companies to stand with their customers. Most claims were rejected as the COVID-19 pandemic was not covered in their policies. Some insurance companies are facing law suits for rejecting claims. The insurance regulators should also ensure client’s claims are honoured. These expressed the need to have clear wordings and exclusions on policies issued. Compensating customers will also increase customer loyalty.
Company leaders and board executives had to work harder and make decisions that will help them keep pushing beyond the pandemic. Measures were taken to invest more in disruptive technologies and to digitize the insurance business. Extra costs were incurred to train employees on how to use the apps available to them, employ more talents in technology and upgrade some of their systems.
Digitization has eased the distribution and sales struggles hence increasing agility. Intermediaries are able to work remotely and improve the customer experience. Customers can seamlessly buy, adjust, and renew policies. It has also enabled customers to get the most out of insurance from anywhere.
Insurers have also come up with cost effective and customer friendly ways to handle claims. Claims will increase customer loyalty and trust in them. With digitization, they have enabled self-service for customers. Also, customers can send the FNOL, file claims, track the claim status and receive settlement. They should put in place measures to handle straight-forward claims instantly.
Insurers will need to rethink their operating models, re-envision their workforce and bring more customer-tailored products to the market that to offer customers value and effectively address their risks and realities. Insurers also need to add coverage for pandemics in their products, offer reduced rates and flexible payments to retain their clients and support them to recovery.
In Africa, insurance is a business people are unsure of. Most people often question its value but some are willing to take the gamble. The pandemic brought out the limit that insurers can respond to and it was a moment for insurers to build trust with the public. The response insurers have offered so far during this period will determine the public’s perspective of insurance and it’s growth in the coming years. The insurance industry should be able to show that it is ready to partner with its clients during difficult times.
