Daily Fintech

COVID-19 supplants InsurTech – moving lower on Maslow’s Hierarchy of Business Needs

Staff working from home.

Premium growth or reduction?

Staff being repurposed or subject to RIF.

Claims- virtual handling or on-site assessment?

Innovation efforts underway- suspend or continue?

Customers with reduced access to the firm or agents.

Supplies- how much to stock, if the supplies can be found?

Start ups- traction had been tough, now there is no friction.

VC’s and funding orgs- how can we support any investment?

Coverage determination for pandemic or microbial infestation.

Vendor partners- how to maintain relationships or leverage their skills?

Patrick Kelahan is a CX, engineering & insurance consultant, working with Insurers, Attorneys & Owners in his day job. He also serves the insurance and Fintech world as the ‘Insurance Elephant’.

image

InsurTech funding efforts produced $6.6 billion globally in 2019, and plans for 2020 suggested a similar level of interest for this year.  That was until a few weeks ago, when coronavirus caused insurance companies to radically shift focus from growth, innovation, partnerships, and lowering performance ratios to a focus on cash conservation, staff support, changes in customer contact protocols, and concerns about pandemic coverage, maintaining policies in force, and stability.

The outbreak is a seismic strategic change event.  Not just issues, but fundamental concerns that suggest fundamental responses by the insurance industry, although I’ll admit there are too many ramifications to fully organize and upon which to comment.

Without question insurance incumbents and startups will feel the effects of Covid-19 on how business has been conducted in the industry during the past several years.  The relationships and collaborations between incumbent/InsurTech will be tested in significant ways, including:

It’s clear that in the current economy organizations will be moving down the business version of Maslow’s Hierarchy of Needs, from the optional to the basics, from discretionary spending to conservation of customer base.

These and other strategy thoughts found their way across my feed during the past week (with the author’s observations added):

 

 

 

This chart from the 2008-10 market recovery period indicates a six-month lag between market recovery and investment level recovery; the current outbreak is of such broad spectrum and probable duration that investment recovery will take longer than that.  Consider the outbreak disruption to last several months and investment confidence to take an even longer period to come back, and strategy decisions made now are even more important than in 2008.

You get three free articles on Daily Fintech; after that you will need to become a member for just US $143 per year ($0.39 per day or $2.75 per week). For less than one cup of coffee you get a week full of caffeine for the mind.

Skip to toolbar