Technological Future of the Insurance Industry after COVID-19 impact
By Anastasia Sokhadze
Friday, May 15
The sudden changes will cause some shock to the industry, which will inevitably lead to significant modifications.
If before most people were not interested in any of the insurance packages, today this attitude is being reassessed. Businesses will pay more attention to insurance. The insurance industry will have to respond to these changes in the short term to make it possible to develop a long-term strategy based on the new reality we have to face up to.
COVID-19 has dealt a huge blow to the world economy and it is impossible to restore it in a short time. First of all, it means that insurance companies have to think of other ways to make money - which they should have been doing since 2008. It is not ruled out that due to the pandemic, the regulatory authorities can introduce new rules for the capital reserve, which will speed up the reassessment process for the insurance industry.
Additionally, whether it is a person, a small or medium-sized business owner, or a large corporate buyer, it is often difficult for them to understand what is causing the loss. This is due to the contract and the terms, which are often too long, and the incomprehensible foreign terminology used there remains difficult to understand to the customer. This can be corrected, but insurance companies will need a lot of time to restore their credibility.
Thus, users will start looking for an insurance package that will cover the damage caused by the global pandemic or climate change. For example, one of the largest insurance brokers, Marsh, has had a PathogenRX infectious disease pay package since 2018. Until now, its use was limited, as the package was considered one of the most expensive offers.
This case may prompt other insurance companies to create a similar product. Old insurance products are becoming increasingly unusable and can no longer meet modern requirements.
The lower-priced insurance products have led to the fact that compensation for losses, especially for small and medium-sized businesses today, is often inadequate. Under the conditions of the pandemic, this problem, despite the growing demand, was exacerbated. The insurance company must be well aware of the seriousness of the situation so that it can then take the right retaliatory steps.
There are already insurance technologies that provide more resilience in the face of future pandemics. When determining certain insurance options, insurance companies turn to new and alternative sources of information or new methodology for analyzing existing information.
The technological solutions needed for the insurance industry will be further developed next year. We must assume that insurance technologies and the current situation will help us to reassess the basics of insurance, which will have a positive impact on this industry as a whole in the future.
