COVID-19 has upended and affected every type of industry across the globe causing most to scramble to adjust to a new normal. The insurance industry is no exception as the pandemic has shined a spotlight on the antiquated methods many providers relied on to determine policies and procedures. However many are using the lessons they've learned to lead to positive changes.(1) "Normally it takes three weeks to get a life insurance policy," said
In addition to bringing forth the downsides to the insurance industry's lagging adoption of high-tech solutions, the coronavirus has emphasized how outdated the mortuary tables are that most companies use to determine their policies.(2) Consumers are also being left behind as their policy holders may try to withhold payment for COVID-related illnesses or deaths by claiming it is an "act of God."(3)
Life insurance companies cannot change the language for active policies, but the legalized style of writing can mean that most don't read every word and may find some unpleasant surprises about their policy as they file claims. Some insurers have stopped selling policies to customers older than a certain age; possible long-term side effects could cause insurers to update their underwriting standards and the threat of a recurring COVID-19 season might mean higher costs in life insurance.(4)
Insurance technology can help companies assess their risk and better serve their customers. Digitization in the insurance industry has had to accelerate this year and the companies that embrace new technologies have boosted their bottom line and benefited their customers.(5) Over the past year, digital adoption in the industry grew by 20% and a
As more and more of their clients turn to digital solutions, insurance companies must do the same if they want to be successful. InsurTech solutions can offer cloud-based infrastructure to both owned and partnered distribution and can help a company rapidly design, develop and distribute bespoke insurance products. Risk management services including proprietary alternative data sets, streamlining portfolio management and digital risk experience monitoring can also help improve efficiency, profitability and growth for carriers, reinsurers, underwriters and distributors.
This change to a more digitized platform also benefits the insurance agent in many ways. Digitization means agents can sell insurance online, telephonically, over Zoom calls, in new ways. Also, gathering the information on potential customers will be faster and easier--not to mention more accurate. It helps agents better assess risk, which could impact the company's profitability. Agents will also have at the touch of a button the latest information and thus break their reliance on obsolete and antiquated actuarial tables. Plus, it will help break the existing backlog of cases caused by the pandemic. According to Ford, adopting technology avoids the usual bureaucratic impediments that have always existed, which have stifled innovation.
"With the right technology, potential policyholders don't have to visit the doctor or answer the same questions over and over to get insurance," said Ford. "We use deeper levels of data, more than 4,000 robust data points, to calculate risk and can use digital data from previous doctors' appointments and medical records to create technology-enabled insurance products that protect consumers and insurers."
Traffk is an innovative insurance underwriting and distribution platform designed to build and launch modern insurance products and brands that scale. With more than 25 years combined leadership in insurance and AI,
1. Farrell, Mark, "How is the coronavirus affecting the insurance industry?" |
2. "Growing Number of Lawsuits Claim 'Old' Mortality Tables Deprive Participants of Benefits – An Update." |
3. Barton, Sian, "Insurers urged to pay claims quickly following BI ruling." |
4. Price, Sterling, "How is
5. Sagalow, Zoe, "Pandemic spurs technology growth in insurance industry." |
6. "3 Ways COVID-19 Will Continue to Impact Insurance Industry in 2021." |