By Zainab Iwayemi
As the world emerges from the COVID-19 pandemic, insurers’ strategic focus is now turning to what the competitive landscape will look like in the aftermath, what it means for their business, and how to come out in front. According to a PwC report, focusing on five key priorities will help organisations to be stronger and more resilient in the post-crisis world.
• Realigning cost structure and sharpen productivity: Insurers impulse might be to cut discretionary expenditure and pause or stop capital investment. However, it is important to take the long view and make sure near-term savings don’t jeopardize the ability to capitalize on the rebound. Capabilities that would enable insurance providers to gain market shares as well as create new revenue streams or simplify business should continue to be top of insurers business
• Supercharge digital transformation to create a digital enterprise: The post-crisis shakeup is an opportunity to put insurers organizational focus and muscle behind the digital agenda in order to create a truly transformed enterprise, from front to back offices. Digitally enabled sales, direct-to-consumer engagement, automated advice, digital underwriting and automated claims adjudication are just some of the high-value opportunities an underwriter should consider. In addition, the ability to build foundational data, cloud and cybersecurity capabilities play a key role in making insurers resilient.
• Carve out new revenue stream: Finding new revenue opportunities is critical in the aftermath of COVID-19. To capture new markets, insurers need to design products that reflect today’s evolving needs. For instance, the usage-based insurance, employment loss protection for gig workers, pandemic business interruption coverage and cybersecurity for remote working. This is also a good time to consider strategic mergers and acquisitions for insurance businesses that have a strong balance sheet and capital position.
• Prepare workforce for the new world: The speed of technological advances has created a significant demand for upskilling workforce. Meanwhile, upskilling workforce is beyond just a matter of pushing out technical training to employees. It requires careful assessment of desired skills and competencies to be targeted, investment in a learning environment, assessment of the impact of change and a systematic way to measure the return on insurers upskilling investment. Importantly, it requires significant leadership commitment and a push from the top.
• Strengthen capital efficiency: Once insurers steered through the immediate capital and liquidity stresses of the crisis, it is important to focus on the longer-term capital management impact of lower interest rates, greater hedging costs, heightened market volatility and defaults, and increasing tax rates.