The ongoing coronavirus pandemic has brought on a crisis that is affecting all global markets. The insurance industry is encountering many watershed difficulties. Insurers and insurance-related entities are facing significant economic challenges.
On the one hand, many companies are confronting massive trials on many levels, but on the other, this crisis is a blessing in disguise. The crisis has accelerated digital transformation within the sector and forced a multi-faceted strategic planning focus. We have noticed that insurance bodies are fast-tracking automation and the digitalisation process, along with studies reevaluating ‘how’ they ‘do’ their business.
Harvesting big data is a key aspect of digitalisation. When we talk about the integration of digital technologies in the insurance sector, we are referring to the IoT, big data and AI.
Around the world, national and municipal governments have been deploying smart city technology in the fight against the pandemic, using it to track the spread of the coronavirus and support the implementation of medical strategies. As well as demonstrating the value of smart technologies, these new applications are helping to shape the future of smart cities.
So far the number of COVID-19 cases in Dubai has been manageable and insurers are expected to be able to absorb these losses. However, if there is a substantial increase in the number of cases, the consequent increase in claims costs will negatively affect insurers’ profitability even further, particularly if reinsurers are not contractually obligated to cover these losses.
So, as we navigate this difficult, extraordinary journey with the pandemic and the resulting repercussions, regulators and insurance entities need to work together to survive the challenges. Communication between regulators and governmental bodies is vital during a crisis.
In the UAE, we are fully prepared and able to maintain the service and security the market is used to. Communication among insurers, regulators, clients and partners has been very consistent over the past few months. I encourage the sector to keep this open conversation going as we search for the best ways to move forward.
Not all doom and gloom
There is yet another piece of good news – InsurTech is expected to attract new customers who have never purchased insurance before. The opportunity exists for insurers to learn from the successes and failures of entrepreneurs who have navigated what is considered a ‘brave new world’. Reviewing your InsurTech strategy and giving technology a greater significance in your organisation may help propel your business forward.
There clearly seems to be plenty of upsides amid all the downsides we are dealing with. By working smart and working together, some of these examples which I have shared may become obvious and able to help you outperform your competition and expand your share of the market beyond this crisis. Prepare to recover. At the same time, plan for and take advantage of a springboard change in customer behaviour and relationship. M