insurance News – Digital or bust: the now and the next for Australian insurers

Executive summary :

While the COVID-19 pandemic has disrupted the global economy on a scale we’ve not seen in generations and impacted every element of our daily lives, it has also reshaped – and is still reshaping – every industry.

The pandemic has created myriad challenges and opportunities

It is creating a myriad of challenges, as well as opportunities, and requiring swift action in order to keep afloat in this age of “never normal”.

The crisis has also fundamentally altered the way we shop, what we value, how we live, work and interact with each other.

New perspectives

We are looking at everything through a new lens, including brands and products; consumer trends that were only emerging pre-coronavirus have accelerated and evolved at an incredible pace.

Digital technologies have played a central role, as we supported friends and family via video calls during isolation and purchased goods and managed our finances digitally as a health safeguard.

Robust industry response

Looking specifically at the Australian insurance industry, we’ve seen a robust industry response: they moved swiftly to remote working practices, prioritising the health and wellbeing of their workforces while maintaining business continuity, and ramping up support to customers and the community.

Due to the virus and the associated lockdown, people are driving less, unable to holiday internationally, spending more time at home and managing their finances digitally at new levels.

Consequently, premiums are shrinking in many lines of business and operational costs are rising. Global Accenture research found the average insurer has lost 35% of its market capitalisation between March and April.

Behavioural change will prevail

While these conditions won’t be permanent, the attitudes, purchasing habits and behaviours which have manifested through the pandemic are likely to prevail. With the future of billions thrown into doubt, the Australian insurance industry can play an important role to help customers through the resulting economic hardships.

It will therefore be essential for Australian insurers to establish themselves as trusted partners, and to up the ante when it comes to meeting new consumer preferences for digitally led services.

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