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InsurTechNZ

Bring on the Innovators… lnsurance after Covid-19?

Even though pandemic risk has long been viewed as one of the single most impactful risks to the world the evidence of political, commercial and individual decision making suggests that society has always taken this most terrifying of risks lightly.

Immunology and virology experts have cautioned over many years that it was simply a matter of time until a catastrophic pandemic strikes….and then it did! Well nobody is taking it lightly anymore. Let’s face it; it’s pretty much the only topic of conversation right now around the entire globe.

Covid-19 feels more significant and far reaching than the usual run of the mill catastrophe. It seems that this event will bring about step changes in societal behaviour because of our learnings about risk, and the reengineering of how organisations, systems and markets work in response to that.

Because society’s response to Covid-19 imposes conditions on us that we have never previously experienced, it also compels us to examine solutions in a live environment to problems like:

  • How do we engage and look after our staff and our customers in a complex, advice led market?
  • How do we remain effective without large face to face meetings and extensive travel?
  • How do we maintain quality in our supply chains so that claims and other services can be delivered efficiently?
  • What are the best ways to maintain or improve productivity and effectiveness without the need for interpersonal contact and paper flow?

It seems clear that, post Covid-19, innovation in the insurance industry will become even more important.

But they say necessity is the mother of all invention and throughout history the most challenging times have always brought out the best in people and surely this will happen once again post Covid-19. In time our focus will begin to shift to what we have learned. What worked well? What mistakes have we made? What will we do differently in the future?

Even in these early days of Covid-19 we are seeing a surge towards Digital First platforms in commerce and this will hasten the need for insurance providers to follow the trend if they are to thrive. Some are well down the path, many more have begun to digitise and there remain laggards.

Experience with innovation to date has shown that providers should avoid the mistake of looking inward only for the best solutions as all too often this results in a refresh at best with incremental improvements or reinventions of existing products, processes and behaviours. This is not a reflection of the imagination of their existing people who have essential knowledge and profound understanding of the business fundamentals, it is more an observation that it’s very hard for them to step outside the existing norms of their culture and operating environment.

The way forward is for insurance organisations to embrace fresh perspectives from the external challengers. Insurtechs have extensive competencies in the examination of customer problems and in the agile development of solutions and technologies. They are free of the constraints created by the “we’ve always done it that way” school of thought.

Future market leaders will excel in part because they have collaborated with those who are free to question the boundaries of existing products, pricing models and operating platforms. These challengers are best positioned to leverage the power of data and technology and eliminate the effects of historic bias and assumptions that are embedded in established practices. 

As Einstein once said, “the measure of intelligence is the ability to change”. Covid-19 is demanding this of us and those that change most effectively will gain advantage as we emerge post pandemic into an environment that in many ways may never be the same again.

InsurTechNZ InsurTechNZ is a working group of FinTechNZ that was established in 2017 to identify relevant themes and issues, support broad sector engagement and lead the insurance transformation journey.