Pandemic Reshapes Personal Lines Plans

The dramatic changes in customer behaviors and patterns fomented by the pandemic are new experiences for the industry.

The traditionally stable P&C personal lines insurance industry has been shaken up due to the pandemic. Insurers have been used to adjusting to economic swings and catastrophes that affect volumes and financials, but the dramatic changes in customer behaviors and patterns fomented by the pandemic and related lockdowns are new experiences for the industry. Driving miles, personal travel, work-from-home mandates and online ordering and delivery of food and goods combined to create new challenges for carriers. Companies have had to rethink their technology plans because of seismic shifts in claims volumes, support for agents and employees working remotely and customer demands and expectations for digital interactions.

SMA has conducted a series of market pulse polls throughout the pandemic, starting in April 2020, as the initial economic lockdowns and work-from-home mandates began to take hold. Our latest survey, conducted this May, assessed how plans are changing and being reshaped as personal lines insurers move forward in the second half of 2021 and formulate strategies for early 2022. Whether we are moving toward a post-pandemic era in the U.S. is debatable, but tech-related plans are moving ahead full steam.

We have observed that after the initial tactical responses in the early stages of the pandemic, there was a great deal of rethinking, reprioritization and new activity related to technology plans. The initial wave in the spring of 2020 focused on enabling a remote workforce and providing critical digital capabilities to agents and policyholders, not to mention the significant rebates provided to policyholders. But when the fall arrived, the technology road map became the subject of major review. Many carriers stayed the course – continuing some of the shifts they initiated in the second quarter. However, some also stopped or paused projects (about one in eight insurers), and some of the more innovation-related activities were pushed out to 2022. But gaps were exposed in areas like first-notice-of-loss and payments, and the need to make these areas digital pushed them to the top of the list. Personal lines companies have been busily implementing or enhancing these capabilities, as well as the general self-service capabilities.

See also: Personal Lines Channel Plans

Fast forward to the middle of 2021. What are insurers planning for the second half and into 2022? SMA's most recent survey shows that virtually no companies plan to retrench or pause project activity in the second half. But there is a significant amount of rethinking for road maps and project reprioritizations, with almost 60% saying they are reshaping or accelerating plans. The flurry of activity signals an acceleration in digital transformation. And it is also a signal that the next couple of years are likely to see a further leap forward in the industry's overall transformation. So, fasten your seatbelts and get ready for the road ahead.

For more information on commercial lines plans for technology, see our recent research report, "Personal Lines Digital Plans and the Post-Pandemic World: SMA Market Pulse Insights." The report also includes a view of insurers' expectations for the workforce come January 2022.

Mark Breading

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Mark Breading

Mark Breading is a partner at Strategy Meets Action, a Resource Pro company that helps insurers develop and validate their IT strategies and plans, better understand how their investments measure up in today's highly competitive environment and gain clarity on solution options and vendor selection.


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