The pandemic has disrupted business activities worldwide. Businesses are adopting a range of strategies to enable business continuity. The insurance industry is also taking various actions to make strategic adjustments based on the scenario and the challenges it poses. The insurers in Australia are also making rapid changes in responses to the coronavirus outbreak. From customer retention to acquisition and business interruptions, the hurdles are plenty. What insurers must keep in mind is that they need to reassess both short and long term strategies.
According to PwC’s report, the COVID-19 impact in Australia could range from a short economic blow that would recover in 2 quarters to an extended recession. So, Australian insurers must account for all possibilities while making their strategic agenda.
Potential impact scenarios on the insurance industry
What challenges are the Australian insurers facing due to COVID-19?
- Rise in unemployment levels and businesses cutting down on expenses has reduced client’s ability to pay.
- Reduced working hours and increase in unemployment rates lowers premiums and PIFs.
- Increased policy relief expectations from clients.
- The need to reprioritize business initiatives.
- Make budget adjustments to cater to changes in operating conditions.
- Higher liquidity risks.
- Increase in potential fraudulent cases.
- Impending regulatory changes increases risk of non-compliance
- Decrease in motor insurance and impact on home as well as travel insurance
- Increase in cost of life insurance claims.
The challenges are plenty and the need of the hour is agility. All planning and strategy must constantly monitored and revised based on the changes in the scenario, in the coming months.
How are insurers responding?
In order to not just enable business continuity, but to establish a stable position in the market during these turbulent times, insurance companies in Australia have been quick to respond, and have taken quick, strategic steps to stay afloat.
- Automatic insurance covers a range of activities that includes delivery of essentials, car insurance extensions for customers isolation overseas, and income protection for the COVID affected.
- Investing in digital tools and solutions to enable seamless, successful business continuity.
- Changes in payment terms – payment date extensions, delayed premium increases and removal of penalties.
- All measures in place to ensure staff can work from home safely, receive salaries and remote work does not affect productivity.
Neutrinos has extended a helping hand to insurers around the world by launching an exclusive solution to cope during these difficult times. Leading insurers are already rolling out our digital insurance sales distribution solution. This solution has a range of features that are enabling insurance agents to resume business as normal while working remotely. Get in touch with our experts for more details.