Insurance Trends Emerging in the Aftermath of the COVID-19 Pandemic

Every industry around the world felt the impact of the COVID-19 pandemic. The property and casualty (P&C) insurance industry was no different. Insurance carriers responded to the challenges of the pandemic in a variety of ways like creating new business strategies, adapting to changing needs, and adopting new digital and technological solutions for their workforces and customers. But which of those changes could be here to stay as we transition into a post-pandemic environment?

I had the pleasure of discussing this topic with two peers and former colleagues in the industry — Consulting Actuary Kendra Letang and Associate Actuary Nicole McArdle — in the August APEX Webinar hosted by Pinnacle Actuarial Resources.

As actuaries, it’s our responsibility to use historical data and other relevant pieces of information to uncover trends and help estimate the cost of risks in the future. One aspect to this is calculating the price insurance companies need to charge today to cover the costs of future claims. As you can imagine, the last couple of years have been nothing like we’ve ever seen before as both the U.S. economy and society recover from the aftershock of COVID-19. In fact, actuaries across the globe have been collecting and attempting to interpret all types of data to identify new trends and help reduce uncertainty in the insurance industry post-pandemic.

Kendra, Nicole and I dug into several industry studies, resources, and other publicly available information to identify common themes and overarching trends across the P&C industry that might be here to stay. We shared our insights with hundreds of other industry professionals across the country in Pinnacle’s August APEX Webinar.

In case you missed it, below are a few key insights from our discussion.

Insurance trends that could be here to stay

Customer expectations are changing.

Even before the pandemic, insurers were asking, “How can we serve our policyholders more effectively?” Results from a recent survey of insurance customers revealed that outside of price, the factors influencing customers' decision-making to buy insurance from an insurance provider have changed over time:

Product selection factors in flux
Source: PwC 2021 survey of 6,000 insurance customers

Broadly speaking, it’s not enough for insurance companies to rely on company brand and prior interactions to get new customers through the door and/or keep existing customers on the book. To stay competitive in the market, insurers must evaluate their value proposition, find ways to become more creative with their products, and communicate the value of their offerings in a meaningful way to their target audience. Further, we live in the age of technology, so it’s equally important for insurers to serve their customers in ways that are easily accessible, convenient and paired with effective risk management practices and advice as risks evolve over time.

The pandemic has accelerated technology’s role as a critical component of insurers’ operating models.

Digital expansion and enhanced technological capabilities were priorities for many companies pre-pandemic, but many insurance CEOs noted that the pandemic sped up the rate of implementing digital solutions.

Digital Progress
Source: KPMG 2020 CEO Outlook COVID-19 Special Edition. Note: due to rounding all rows may not equal 100.

We continue to see companies driving innovation through technology in their operations, specifically in the quoting and claims processes, as well as in response to catastrophic events.

Insurance is leveraging technology more through intentional partnerships.

Over the past couple of years, several insurers teamed up with other technology and insurtech companies to provide more digitally-focused insurance solutions to their customers. Here are just a few recent examples:

We expect to see more of this in the years to come as insurance companies identify gaps and seek opportunities to leverage assets of players in the technology industry for their customers. As such, these partnerships allow insurers the ability to provide better risk management tools and solutions — like telematics, property sensors and virtual claim inspections — that can improve the customer experience and make customers’ lives easier in the process.

For the full discussion, the webinar is available on-demand and can be accessed here:

Pinnacle APEX - This Just In: Exploring an Evolving Insurance Landscape in a Post-Pandemic World

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Dalesa Bady, ACAS, MAAA

Dalesa Bady, ACAS, MAAA

Actuary

Dalesa is an Actuary at GuideOne Insurance, responsible for pricing the Core business segment and supplying stakeholders with actionable insights to help drive the organization’s strategic and operational initiatives. Prior to her career at GuideOne, Dalesa spent over 10 years in a variety of roles in the property and casualty industry and has experience in pricing for personal lines of insurance, reserving, product and rate development, and predictive analytics. She currently works from home in Dallas, Texas and is also an Associate of the Casualty Actuarial Society (ACAS) and a Member of the American Academy of Actuaries (MAAA). She earned her bachelor’s degree from The University of Texas at Austin and has a passion for mentoring and engaging with others interested in the actuarial profession.

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