Riding The New Normal: What Insurance Businesses Must Do

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Thursday, February 18, 2021 / 09:00AM / Oped by Nkemchor Omife* / Header Image Credit: NAICOM

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COVID-19 has set an inconvenient code of evolution for many industries including the insurance business which has had to muscle through a season of rethinking, reimagining and restrategizing of its core purpose as companies in larger numbers falter and business mortality rates become top-of-the-mind considerations.  


As the pandemic becomes a fact of daily existence Nigerians are beginning to accept the risk protection options that insurance offers in hedging against unforeseen circumstances. Policy covers like umbrellas can be pulled out at times of inclement social or economic conditions. This was used to a good advantage by some traders and enterprises when the recent EndSars protests in Lagos led to rampant looting and damaging of physical properties across the state.


Insurance companies unlike other services sell "promises" against events that are uncertain and unpredictable but need to be mitigated by people pooling resources together (by way of insurance premiums) to intervene in the replacement of goods or delivery of healthcare support if any member of the 'pool' requires help to bounce back from a social or economic loss.


Also, due to the recent COVID-19 pandemic and sundry social and economic dislocations that took place in 2020, there have been early warning signals sent to individuals and businesses about the importance of insurance and the need to cover business and personal risks by pooling insurance premiums together to reduce the adverse impact of unforeseeable tragedies on individuals or corporations. Indeed, COVID-19 flipped the risk protection light switch and accelerated insurance awareness across the globe, as people increasingly began to realize the importance of insurance cover at times of social, medical, and economic shocks.


From being a disruptive elephant in the room to serving as a patient dove providing peace of mind, insurers are gradually becoming central to the business and social decision-making processes at the heart of the 'new normal' shaping contemporary economies. Census shows that a lot of people in the last year due to economic meltdown and uncertainties died to fear, panic, and loss not necessarily diseases. Business owners can now take on certain business ventures and go to bed, because of the new "burden-bearer" thanks to insurance.


In instances where a key family member or business partner kicks the bucket, activities can go on without interruptions or disruptions with the insurance industry playing the "peacemaker" that ensures calm.


However, in recent times due to the realization of benefits gotten through insurance, insurance has now become a product that consumers are most likely to buy without the need for a big sales push. Therefore, with all eyes on insurance companies and financial institutions at large due to dust raised by losses and damages, insurance must concoct fresh strategies to constantly meeting the demands of customers.


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What Insurance Companies Must Do


Insurance companies must become expert managers of the unexpected. The future of any insurance company is seen in their ability to fast track into the realities of the future, find out possible problems that may arise, and find viable solutions that will speak to the need of individuals and businesses before they become a reality in this present day.


Insurers, have to be quick thinkers and practical problem solvers in these present times. In the last few months thinking of what was termed normal saw an unprecedented shift in what felt like the future. The present future will require insurers to be far more than innovators but will require a more flexible approach that makes them managers of the unexpected.


In light of the new normal thrust, there will be a great restructuring of economic, business, commercial, social demands by individuals, and organisations. Insurance companies will have to draw up new mechanisms and operations to meet the demands of customers when in need. For the digital natives, such expertise from the insurance company has become unavoidable.


Also, Insurance companies must activate an effective communication system. As problems are different, so also are solutions. Insurers must adopt flexible approaches to meeting various needs rather than drawing up templates and pre-existing patterns of carrying out operations.


Insurers must be swift in communicating effectively with their customers, the need of consumers months ago will not be the same need for this present time as there is a dramatic shift in demands both commercial, social, and business.


The "new normal" as it is being termed has reshaped how we live, work, and use technology. Insurers have to reinvent themselves based on these shifts to have any chance of surviving these present-day and times. Insurers will have to be more precise and accurate to function maximally and this will only be achieved through quality and effective communication. It would be pleasing to know that insurance firms are already thinking in this direction.


There must be a priority in providing a digital experience. Insurance companies over the past few years have proposed models that tend towards digitalizing the process. Most insurance companies have been considering a massive digital reorganisation. Each passing day, a large trunk of consumers are moving online, this has led to insurers playing catch up and investing vehemently in digital transformation dynamism.


The COVID-19 pandemic has heightened this process as more and more customers adopt digital, forcing most insurance companies to fast-track their existing business and operating models. Insurers as well as other businesses have experienced periods of downtime due to carrying out operations that excluded digitalisation.


A major limitation that arose during these times involves the transactions related to insurance that slowed down for insurance enterprises while working remotely. A significant fall can be seen in the delivery of hard copy documents. Most insurers over the years have relied remotely on courier services for the delivery of hard copy documents and during the lockdown experienced a rude shock as courier services did not escape being grounded during the lockdown by the government, except in cases of delivering essential services.


This simply points a finger to the fact that Nigeria and the world at large wouldn't experience speedy growth except for the expansion of technology is being considered.


A new dawn is imminent if digitalisation is embraced to sustain and provide faster solutions that will appeal to and cater to the insurance needs of the customers. This new move towards an increase in digital adoption could lead to a permanent shift in consumer behaviour and penetration of insurance.


Finally, with so many fingers and eyes fixed on insurers with the birth of the supermoon across the world, insurers will have to keep thinking, innovating, and devising methods and technologies that will help them survive these times as any laxity and complacency might sink the boat of the entire insurance industry if not properly managed.


*Nkemchor Omife is a public relations expert with an interest in strategic corporate communications.

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