How the Pandemic has changed the insurance industry forever


Darren Wray, CEO of Fifth Step a firm that has over a ten years experience of helping to improve insurance businesses in London and international markets examines some of the process and technology implications of the pandemic. 

There have been many pages written about how the world has changed as a result of the pandemic, but the ones that I've read have tended to focus on the changes in consumer buying and the impact on insurance buying sectors such as the airlines. None of which offers any real insight to what insurers and brokers are or should be doing.

A Geo-Agnostic Workforce

As governments around the world began the enforcement of the first wave of lockdowns, insurance companies and brokers of all sizes initiated business continuity plans to allow them to continue functioning with staff working at home.

Most firms did an excellent job of getting their workforce working. Many IT hardware suppliers have reported a massive uptick in their sales in the UK for the week of lockdown. This is a sure sign that most firms had plans but had not considered a Covid-19 type scenario. Still, the most crucial part of this is that most organisations were up and running with staff that could work from home doing so within a few days of lockdown commencing, this is an achievement that should be recognised.

The issue that many organisations face is that they have not optimised their processes. This means that home working staff could not run some processes and in the best cases they were far less efficient than they had been when everyone was in the office.

Process efficiency is still a problem for most if not all organisations, as staff try to be as resilient as possible, making processes work the best they can. What most staff are not equipped to do, though, is look at processes holistically to make them work together between teams or departments. Such change needs the foresight of senior leadership and expertise to implement with pace.

With second lockdowns underway in several countries, leadership teams need to take action to change their firms to ensure they are efficient in this new world.

Legacy Systems

The insurance sector has long had a challenge with keeping its systems updated. After all, the nature of insurance has evolved. Still, insurers and their CIOs have been very good at extending the life of computer systems, allowing them to write new lines of business and adhere to new regulations.

Since the first lockdown began in the UK, on March 23rd, consumer and business habits have changed dramatically. Many claim that the move toward online and digital processes has achieved five years of progress since March, where does this leave the insurance sector with its legacy systems?

Many firms in the insurance sector, be they brokers, insurers or reinsurers are now looking at the changes that they need to make to enable them to transact more business electronically and without the human workarounds that they have had in place previously. A new client that I spoke with recently, for example, talked to me about how they had people re-keying data between systems, a process which is as fraught with the possibility of errors as it is with inefficiencies.

Most firms know they have to make a change; many are concerned about costs and the perceived risks of implementing changes in critical systems. This view ignores the risks and lack of agility associated with the inherent inadequacies that are part of legacy environments and their inabilities to use modern methods of joining computers systems together and allowing them to integrate closely.

It is important when making changes to legacy systems that there is a thorough and well-planned strategy, this usually starts with a process of environmental analysis, to understand and document the systems and how the data is collected and flows between them. With environmental knowledge and strong project management, firms can make changes to even the gnarliest of systems can be made safely and cost-effectively.

Surely, we don't Need to Act Now?

Phrases like this have been used by many a budget holder over the last decade or so. It's a trite statement to say that the world has changed, but for the insurance sector, this really is the case. Of course, we all hope that things are going to return to normal, but I fear that by the time that things return to anything near normal that those firms that decided to keep their legacy systems may not go the distance.


Darren Wray's picture

Darren’s background is in strategic management of IT for organisations from start-up to multinational corporates. His experience encompasses a number of industry sectors, including financial services and media.

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