COVID's impact on pricing, coverage & digital trends
Accenture's North American P&C leader shares insights on how the pandemic will shape insurance and the importance of building a digital social presence.
As we move into 2021, the insurance sector should expect continuing hard market conditions, according to Jim Bramblet, managing director — insurance lead for Accenture‘s North American operations, who explained the pandemic will shape pricing and coverage in the year to come.
“Carriers are going to have to continue to look at pricing vs. risk, and ask themselves what are the current consumption patterns for assets they typically insure,” he said, giving for example the number of rebates around personal lines seen in the past year. “What is that going to look like going forward?”
He added even outside the pandemic, carriers should think about changing consumption patterns for personal lines, given the revival in home improvement investments and “cocooning” trends. This makes it paramount that insurers find the right pricing for these fundamental changes in consumption patterns.
Concerning coverage, the past year exposed a gap in policies around pandemics and business operations. This is particularly true for business interruption claims, which might take a public-private partnership to cover.
“There has to be some collaboration between government and insurers, whether through primary insurance, reinsurance or a government backstop,” he said, adding more needs to be done than “waiting for relief packages to run through the government.”
As previously reported, the enormity of losses stemming from COVID is believed to be beyond the abilities of the private market to cover.
COVID accelerates digital
From consumer-facing technologies to in-agency systems, the pandemic has propelled the industry’s investment in digital tools, according to Bramblet, with spending on distribution and customer-facing tools showing the best ROI.
For the industry to capitalize on this, the transition from a digital environment to a more traditional insurer/policyholder connection should be seamless. Regardless of how a client wants to buy a policy — in person, through a website or on a mobile app — the insurance education and research process almost always start digital now, Bramblet explained.
“You want to make it as easy as possible for them to bridge from the digital world into your carrier system,” he stressed.
The ability to build a personal social brand digitally is also growing in importance because of the pandemic, according to Bramblet, who explained agencies cannot at this time have a presence in their communities through traditional means such as sponsoring little league teams or attending a family picnic.
“Make the investment in a digital presence and digital brands. They have to be built,” he cautioned.
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