We’re learning daily from our customers as we walk with them through the most abrupt and disorienting changes many of us have seen—in our industry, the economy, and society as a whole. Just a few months into the COVID-19 pandemic, we’re still experiencing the initial impact together. Entire staff are suddenly working remotely and tackling the operational challenges of engaging with customers or even collaborating internally.
But in these challenges, we’ve discovered something else: the resiliency of our organizations in adapting to current conditions. It’s helping us to meet this moment for the good of individuals and business that need a strong insurance industry more than ever. As we enter this next phase of the pandemic and economies begin to reopen, it’s important for personal lines companies to acknowledge the challenges and unknowns created by the crisis and proactively develop future-facing strategies.
We see three key strategies insurers must embrace in the “new normal” to help drive profitability and growth in the long term:
1. Accelerate automation and internalize digital transformation
Digital disruption is more present than ever in the COVID-19 era. While many insurers have embraced enhancements to core systems, numerous processes remain manual and generally rely on in-person interaction. The onset of the pandemic highlighted these challenges and identified critical areas where a digital-forward approach is more than a smart strategy; it’s indispensable to help reduce cycle time, lower expenses, and improve operational efficiency.
One of the gaps most prominently exposed by the pandemic was in property inspections, a critical underwriting step. Verisk’s virtual inspection tool, OneXperience, was born out of listening to our customers and has helped many of them overcome the challenges of working in a new, virtual environment where digital cameras and imagery can help supplement the human eye. Personal auto insurers also feel the pressure to digitize and accelerate workflows through data and analytics. LightSpeed® Auto can help deliver a data-driven approach to unlock one-rate acquisition that takes verified leads from quote start to bind in seconds. Businesses that adopt and accelerate digital transformation will likely be better positioned to manage acquisition costs and support customer needs as they adapt more quickly to the new normal.
2. Invest in the right data to assess business impact
The COVID-19 crisis brings unprecedented challenges across industries in ways not seen since the Great Recession, making it difficult to predict the full behavioral and economic consequences. In the short term, many insurers have taken a customer-first approach by enacting premium credit programs and relaxing some underwriting guidelines. Looking ahead, insurers will need to see clearly the impact on their book and to seek alignment with overall market trends. For example, new driving patterns during the pandemic have reduced commuter traffic volume, but we’ve seen indications of an uptick in risky driving behavior that may affect severity.
The crisis, though, is constantly evolving and presenting difficult questions for insurers trying to adapt. How can they explore the power of connected car data to help meet potential demand for usage- and mileage-based products? How can they cost-effectively keep price aligned to risk, identify application fraud, and fight premium leakage across the policy life cycle?
Now more than ever, it’s imperative for insurers to use diverse, high-quality data, from detecting critical changes on individual risks to obtaining detailed loss histories. Verisk stands ready to help and to bring our deep bench of expertise and vast data resources to bear on the new questions we’re facing together for the first time.
3. Anticipate key events with market and customer insights for smart growth
The time is now for insurers to focus intently on customer engagement with an eye toward retention and anticipating potential causes of defection. For example, it’s not clear whether auto rebates will help retention or stimulate shopping behavior. But early data signals can alert you when your customers are in the market, so you can be ready with tailored responses. Insight into expected consequences of the pandemic, such as foreclosures and potential changes to property condition, also may highlight a need for timely customer outreach. And it’s important to monitor the updating of loss costs as effects ripple through the economy and along supply chains.
As the full impact of COVID-19 is still unfolding in real time, Verisk is here to help support our customers by monitoring the impact on personal lines and providing insights into the top trends, predictions, and strategies that will help you operate for success in the new normal.
For the latest trends we’re seeing in personal auto insurance, register today for our upcoming webinar, which is part of our new normal series.