With uncertainty persisting over the likely duration of Coronavirus lockdown restrictions, Altus looked at the impacts on long-term insurers to see how they have responded so far, what more needs to be done and how the industry can take some positives out of the situation we are facing.
Many of the impacts we have observed apply equally to wider financial services businesses and even other office-based service industries. Key themes emerging include:
- A hit to firms’ bottom lines as revenues based on percentage of assets fall in line with market volatility, while claims payments and emergency capital spend such as equipping staff for remote working have both increased.
- Operational impacts, as insurers experience elevated numbers of calls from concerned customers, including protection claims, queries on product coverage, additional withdrawals and fund switches. Call centres have had to move “virtual”.
- Organisational changes, as Business Continuity Plans are enacted at scale, without the ability to draw on secondary office locations usually on standby for one-off events. With home working likely to stay in place for life companies for some months, firms need to ensure the right risk and control frameworks are in place, as well as supporting employee wellbeing.
- In many cases, business change programmes have had to pause or be re-prioritised as IT staff and SMEs alike had to focus on keeping the lights on and providing the best possible service to clients and advisers.
- Procedures have had to adapt, especially those where wet signatures and manual paper-based processing is more often in place. This can encompass many processes for customers in vulnerable circumstances, such as bereavement and sickness claims.
Nonetheless, the industry has proved it can adapt at speed to circumstances, and there are many positive changes we can expect to see once the pandemic is over. Insurers should start to plan for these now.
We hope you find our latest research paper useful in helping you through the current situation. Please get in contact if you’d like to discuss further.
