Call Centers And Insurance Companies: What Changes Have We Seen Due To COVID-19?

The insurance industry is a highly complex business that involves multiple processes for managing existing policies, setting and selling new businesses, renewing policies, answering customer queries, and processing claims. Added to this complexity is the highly intricate interaction between insurers and their external networks: for example, brokers and agents.

Not surprisingly, therefore, the COVID-19 situation has posed a wide range of challenges for insurers to maintain their operations as work, as we knew it before the pandemic, has been disrupted.

So how are insurers doing, what are the critical crisis points, and what long-term changes in operations can we see in the future as a result?

Looking ahead, this situation is likely to result in a series of lasting changes:

1) Remote Work Will Extend Much More

With insurers investing more in connectivity networks, collaboration tools, virtual team protocols, and reviewing the amount of real estate they really need, getting on the cloud will be key to increasing the quality of remote work. Additionally, application providers are allocating more financial resources to expand the range of functions (communication, document sharing, administrative tasks) to further optimize teleworking.

2) Digitized Systems And Processes, Cloud-based Services, Automation (Use Of Robotics And Artificial Intelligence) Will Be On The Rise

Those insurers with more advanced administrative, underwriting and digital claims processes are in a much stronger position than others, even if the processing time is slower now than under normal conditions. Those without these abilities are likely to have more difficulties. In fact, there is a risk of losing customers to more digitally enabled competitors, particularly on personal lines where the patience of many customers with non-digitized processes these days is low.

3) Capacity Will Be Increased

As operations are carried out more efficiently and quickly, due to the current state of the sector, insurers will see opportunities to change their capacity and create a more agile workforce for possible volume changes they may have to face in the future.

4) Social Responsibility Will Increase

Some insurers are offering more flexibility in grace periods for premium payments, claims processing waivers to speed up payments, reduce the need for multiple documents, etc. All of this will require specific operational processes to adjust and adapt with the times at a rate that was probably not imagined before COVID-19.

Arguably, the insurance industry has lagged behind other industries in terms of digitization implementation. All of this has led to an acceleration of customer expectations from a digital perspective that challenges insurers from a planning point of view.

5) Digitization Will Be Imposed On The Regulation

When rules and regulations conflict with the digital agenda in different jurisdictions around the world, there will be an accelerated approach to finding practical and modern solutions and pressure for regulations and laws to change.

6) The Offshoring Services Will Review Their Strategy

To mitigate concentration risk, insurers will consider distributing their operations to a greater number of locations. This type of operations, also known as offshoring, designates the activity, by companies based in one country, of moving or building factories or production centers in another country, where they will generally face lower labor costs, less pressure on labor laws, fewer government regulations, reduction of other types of costs, or other benefits from the point of view of economic profit for the company.

7) Scenario Planning Will Become More Complex

Insurers will have to be prepared to face any type of challenge regarding their services: IT failures, additional staff reductions or new spikes in the demand for services, among others. Therefore, they will have to visualize possible scenarios and carefully plan the development of damage mitigation strategies.

8) The Proposal Of New Value Propositions

Insurance companies will, from now on, tend to go ahead and plan what kind of claims could be filed to better serve their clients and allow payments to flow more quickly. Similarly, this can assist insurers with new value propositions to clients, brokers and agents, and other external stakeholders.

9) Broker Models Will Be Reviewed In Some Markets

Currently, insurance brokers have more direct contact with clients, especially in SMEs (small and medium-sized companies) and certain market segments. In the future, insurers will decide to do more business with clients, perhaps through digital channels, which in turn could affect the customization of these products.

10) Business Continuity And Resilience Planning Will Become A Critical Approach

This is one area in which regulators will put pressure on insurance companies. There will be multiple lessons to be learned and deeper insight into plans in areas such as offshore centers.

So far, the sector is holding up well but has shown weak points. The worsening of these will depend both on the effectiveness of the actions that insurers take to address them and on the severity of the pandemic from today.

Regardless of the unknowns, the insurance industry is working at a good pace and with a great commitment to offer its employees, customers, distribution channels, external stakeholders and companies the support and service they need.