The COVID-19 pandemic is an unprecedented health and humanitarian crisis that has disrupted the global economy. It is affecting L&A insurers more acutely than past economic or pandemic shocks with downward pressure on investment returns due to the volatility in financial markets.
Our industry must rapidly assess these fast-changing developments, and the ensuing impact on our people, our customers and our organizations. There are steps you can take to help minimize the immediate effects and better position your organization in the “new normal.”
What to do now
The time to act is now. Here are the next steps that we can help you put into action so that as we emerge from this crisis, we do so from a position of strength.
Take a look at your policy administration systems and their readiness to adapt to the following immediate needs, some of which are the result of recently passed legislation in California, New York and North Carolina:
- Grace periods regarding cancellations and timely payment of premiums;
- Deferred premium payments;
- Avoiding non-renewals when policyholders fail to make a payment;
- Increased flexibility for policyholders to obtain benefits;
- Extended grace periods for policies;
- Revise premium payment plans to avoid a lapse in coverage.
Additional considerations for life and annuity carriers:
- Potential for negative interest rates and for a variety of scenarios within and after the guaranteed period including
- Negative rate with minimum guaranteed interest as 0 percent.
- Negative rate with minimum guaranteed interest as greater than 0 percent.
- Negative rate with no minimum guaranteed interest.
Now is the time to ask yourself: Will your policy administration systems adapt to address the above issues, and if so, does your in-house team have the capability and capacity to quickly implement and test the necessary configurations?
Over the next three to six months:
Focus on digital employees and customer journeys.
Make sure that you’re addressing the physical and mental well-being of your workforce, especially the frontline digital workers. Consider refocusing them on customer value management, agility and workforce automation/optimization. Your actions—more than words—will have a greater influence over reinforcing the trust you build with your customers and employees. Words matter, as well, so use digital communications frequently to strengthen the bond of trust, particularly when it comes to claims eligibility and processing.
Digitally enabled go-to-market models
Social distancing is expected to extend well into the future when more COVID-19 treatment options and a vaccine become available. With many of you are already in various phases of your digital journeys, continue to look for opportunities to leverage your technology to address existing and new markets as more customers become receptive to conducting business digitally.
Cost reductions to focus on recovery and the “new normal”
Take a look at your current third-party spend and prioritize investments to help reduce your operating costs and improve operational efficiency in the near term. Then analyze current IT projects and look for ways to boost upfront value. In some cases, you may find that applying agile principles can deliver a smaller portion of the project that can deliver a larger upfront return and better position you for the new normal.
Apply analytics to optimize product and channel performance
Now more than ever, analytics can help drive operational efficiency and support a remote workforce. Consider applying analytics to establish baseline performance metrics and track them as the industry navigates the pandemic to gain insight into how you may need to adapt your product and distribution strategy to address the new normal.
How Accenture can help
Accenture continues to work across its industry groups in real time to understand and advise how businesses must adapt to the structural changes to markets and operations that will remain once the pandemic ends. The insurance sector can serve as an important source of strength during the crisis and as a recovery mechanism for industry. We continue to develop new technologies that can help businesses regain their market resilience and competitiveness, amid altered consumer habits and civic life.
We’re here for you. Let us know how we can help. Whether you need flex capacity to configure and test policy management systems or guidance for your in-house teams, contact us directly. And visit this site for updated information and perspectives on how we’re tackling this challenge together.