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Are we prepared for the big opportunity?

Source: Middle East Insurance Review | Aug 2020

The sector must be ready with the right products and services to meet the increase in demand for insurance as a result of the pandemic. 
Basem Odeh, CEO, Arabian Shield Insurance
 
As we are still in the middle of the storm, the question on what kind of lessons we have learnt as a sector is a bit premature. The most important lessons will only be learnt once this is over because “only when the tide goes out do you discover who’s been swimming naked” as Warren Buffett said. 
 
However, based on issues experienced so far, one can try to address the subject. The biggest opportunity in my view is that insurers are not in need of the ‘need arousal’ bit of the sales and marketing strategy.
 
It was obvious that certain insurance covers or extensions to standard covers were difficult to sell on the grounds that probability of it happening is very remote. Post-pandemic, business owners will tend to be more proactive in requesting more covers and extensions due to the impact of the pandemic on their own operations or even on others’ businesses. 
 
Moreover, individuals will be more vigilant to the insurance needs at the personal level for the same reason. Therefore, one big opportunity is the increase in demand for insurance, which will lead to increased penetration in all markets around the world. This is very critical, taking into consideration the cost-cutting direction which many governments, corporates and even individuals will follow as a result of the losses suffered during the crisis. For this opportunity to be properly utilised, insurers have to be prepared with products and services that cater for such demand.
 
On another front, insurers had to put all contingency plans into motion. Although some experiences were not great, this was a big lesson for leaders on how to operate more efficiently with less resources and cost. Wise executives will harness modern technology to serve business objectives in every aspect. 
 
Review current strategies 
The pandemic is expected to greatly impact the way insurance and reinsurance companies will conduct their business in the future concerning designing of products, marketing and claims settlement. One of the great challenges facing the industry everywhere is the clarity of policy wordings. As we saw, there is a debate in almost all markets over the eligibility of cover in certain grey areas. It is imperative that the wording of the cover and exclusions will be thoroughly reviewed to achieve more certainty and hassle-free operating clauses. Regulators, market associations and lawyers are players in this game. 
 
Strategies of insurers will have to be updated or even revolutionised to reflect more levels of empowerment and delegation in order to move and cope with future challenges at different levels without much bureaucracy. M 
 
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