Tag Archives: pandemic

How Workplace Has Changed for Women

The COVID-19 pandemic had a devastating impact on businesses and workers worldwide. Companies had to adopt online business models to survive, which forced an unprecedented workforce migration as employees left their offices to work from their homes.  As the world starts to emerge from the pandemic, we’re beginning to understand the many effects of this economic and social upheaval on workers. New research shows that gender inequality, long a problem in the American workplace, worsened during COVID-19, and the insurance industry is no exception.

In March, Accenture surveyed 176 U.S. women in insurance to understand how the pandemic and the sudden shift to remote work affected them. We looked at the professional and personal effects this had on work-life balance and caregiving roles. At the same time, we surveyed 134 C-level insurance executives in North America to discover what the future of work looks like for their organizations. The results were both surprising and concerning and confirmed that the pandemic has had a significant impact on the well-being and productivity of women.

Key observations

The survey reiterated the long-standing conflict between women as workers and women as caregivers, but the numbers were still striking. Most of our respondents are working mothers, with six in ten (59%) having school-aged children at home, and 68% saying they are the main caregiver for children or elders in their households. More than half (56%) say they face increased pressure as the primary caregiver as they juggle childcare responsibilities due to school closures, while working longer hours because of record business activities.

Our results revealed that almost one in three (32%) women working in insurance left their jobs temporarily or permanently during the pandemic – a sobering statistic. When asked why they left, 21% said childcare/eldercare priorities were the main reason. Meanwhile, 30% of women who remained at their jobs during the pandemic are considering leaving.

Additionally, 45% of women in insurance feel they have lost opportunities to grow their careers during the pandemic. Similarly, 44% say the pandemic has adversely affected their career progression while 39% feel disconnected from or forgotten by their companies.

Employees vs employers

We uncovered a stark disconnect between employer and employee attitudes on a number of issues. This includes the level of support women receive from their companies, the expectations for their return to the office, and the post-COVID changes they expect before returning to work. These disconnects must be addressed, because COVID added even more caretaking responsibilities to women, and they are not going away.

See also: State of Diversity, Inclusion in Insurance

Consider the disconnect between corporate leadership and female employees in the number of days they are expected to work from the office. Nearly half (47%) of women surveyed believe they would lose advancement opportunities if not present in the office five days a week post-COVID, but only a quarter (26%) want to work in the office that much. More than a third (34%) want to work remotely full time, with the rest preferring a hybrid approach. By contrast, almost all (91%) executives would prefer employees to spend four to five days in the office post-COVID, and more than half (54%) believe their employees share that desire.

When women were asked how their employers can help, more than a third (39%) cited flexible scheduling, followed by increased paid leave (24%). This appears to be an area of progress for insurance firms, with 43% of women surveyed saying their employer is trying to offer more flexible scheduling. 

A permanent culture shift

So, what does this information tell us, and what should insurers take note of, as many look to return their workforces to offices in the coming months?

First, remote working is here to stay, so companies must embrace this new model to support women and their needs, or risk losing them along with their years of experience, institutional knowledge, and dedication.

Next, in order to accommodate the remote or hybrid workforce of the future, companies will need to engage in a deliberate cultural change, one that ensures “remote” does not mean “less effective,” and that remote workers are not penalized for missing out on traditional in-person interactions, like the conversation over a cup of coffee or the face-to-face mentoring session. They will need to create return-to-office strategies that promote flexibility for women who need to juggle additional responsibilities outside of the workplace.

Finally, if firms incorporate flexibility in their return-to-office strategies, it may help prevent women from leaving the workforce in the future and persuade women who did leave to return.

What insurers and other financial institutions do next will have a major impact on the future of women in insurance, from entry-level workers all the way to the C-suite.

Where Does Life Insurance Go Now?

In 2020, people flocked to purchase life insurance amid the looming fear and uncertainty brought by COVID-19. None of us had experienced a global health crisis like this, and, when mortality is at risk, the demand for security increases. 

While life insurance policy sales increased 2% overall in 2020, other indicators showed just how much life insurance was brought to the forefront once again, following a decline in policies sold over the decade prior. CNBC reported a 50% spike in Google search traffic for “life insurance” between March and May 2020, while leading carrier Northwestern Mutual saw a 15% increase in policies sold between April and September compared with the year prior. On the annuity side, sales were up $58.6 billion from 2019. 

You’d think these numbers would be a good thing for insurance companies and agents, but that wasn’t necessarily the case. The massive influx in applications caused insurance carriers to become increasingly bogged down; applications that once took one to two weeks to review and process were suddenly taking over one month. And thresholds for coverage became even more challenging to meet, with many premier carriers only insuring people if they met a $750,000 coverage threshold. This continues to be the case today for many major carriers. 

Luckily, simplified-issue insurance let people who are generally healthy just answer a handful of questions. And, with instant-decision life insurance, many people didn’t have to get a medical exam to enroll in a policy, and a decision was made in two minutes as to whether a carrier will cover that person. Insurance companies have also found easier ways to do underwriting or attending physician reports, which are essentially a doctor’s official response regarding a patient’s current state of health and health history. 

And yet, as the demand increased and both simplified-issue and instant-decision insurance became more prevalent, so did the need for efficient, user-friendly digital insurance quoting and sales platforms. But our industry just hasn’t kept up with the times. It has been using the same antiquated application process for decades. 

On the consumer side, the process of applying for life insurance required a 15-page application, doctor’s appointment and various other qualifying factors and steps (if the person doesn’t qualify for instant decision). And, the person would be on the receiving end of many broker marketing calls, and have to pick from 20 companies on the basis of pricing and insurability.

Now, as people’s health and desire for financial security have been in jeopardy, there’s been a needed shift in how we go about buying and selling life insurance. For instance, our platform, Quote & Apply, supports agents in making the transition to digital as seamless as possible. A person can go through our entire application in under five minutes and be quoted a policy (with several coverage options dependent on the person’s unique history) right on the spot. There are just six questions (age, gender, height, weight, smoking history and a rating of general health). Insurance companies can directly contact the medical information bureau and a person’s doctor through a health portal and make instant decisions while offering numerous policy options. 

See also: Why to Provide Life Insurance for Workers

The implications of COVID-19 spurred this heightened awareness of the importance of life insurance, and I believe that it’s every agent’s fiduciary duty to offer these policies to their clients. Life insurance gets people through the most challenging times of their lives.

We’re not going back to where we were as an industry, even post-pandemic. COVID-19 put a microscope on the issue of our mortality and how life insurance can provide an essential layer of security for people everywhere. COVID simply crystallized the demand for digital wholesale life insurance solutions.

Between the shift to a remote workforce, and the pandemic itself, we had no choice but to evolve; and we now have a chance to create widespread life insurance literacy through this experience.

Pandemic’s Lessons for Auto Insurers

It’s impossible to deny the profound impact that the pandemic has had on every person and every business, and the U.S. automotive insurance industry was no exception. Previously mundane errands such as a trip to the grocery store became a battle for survival — and toilet paper — and once-gridlocked highways were replaced with barren stretches of asphalt. 

On a more serious level, the global health crisis sent shockwaves of financial uncertainty across the nation that was also addressing considerable emergencies on both the civil and environmental fronts. 2020 quickly cemented itself as a year for the record books, and not for good reasons. 

However, as tough as COVID-19 has been, there are hidden lessons in connecting and analyzing what would otherwise have been viewed as dissociated events. And when compared with years past, the auto insurance industry can turn these pandemic-led transformations into actionable insights for the industry to evolve and adapt to meet future disruptive events. Our recent Auto Insurance Trends Report focused on analyzing the “new normal” of consumer behavior, which has a direct correlation to critical carrier-related factors such as underwriting, claims and those actively participating in telematics exchanges or usage-based insurance programs. 

Here’s what we found:

Empty Roadways Bring Out Lead-Footed Drivers 

When looking at the initial timeline of the pandemic, the sweeping stay-at-home mandates and shutdown orders across the country created a drop in miles driven of over 40% from March to April 2020. Even normalized mileage hovered between 83% and 88% of 2019 levels for the second half of the 2020 calendar year.

The empty roadways, particularly at the beginning of the pandemic, enticed many lead foot drivers, who took the opportunity to turn highways into personal drag strips. The first spike in elevated speeding rates occurred around mid-March of 2020 and remained 110% of 2019 data recordings for much of the remainder of the year. With those open roadways, drivers favored their accelerators over their brakes, resulting in a drop in hard braking instances during that same observed period. 

See also: How Insurtech Thrived in the Pandemic

Gen-Z Drives DUI Trends 

As part of our generational data insights, where we examined driving behavior across multiple age brackets, we discovered a particularly troublesome trend among our nation’s youngest drivers, Gen Z. 

Classified as ages 22 and under, Gen Z drivers ranked the highest when observing violation data across DUI infractions, overtaking those in the Traditionalist age group (ages 76-plus) who were the highest offender the year prior. While restaurant and bar closures led to a potential overall reduction in total figures, the months of April and May 2020 indicated an approximate 50% increase of DUIs among Gen Z drivers. 

Collisions and Claims Down, Severity on the Rise

When looking at the onset of the pandemic in 2020, much like the reduction in total miles driven, the volume of collisions and subsequent claims experienced considerable drops. With a 19% drop compared with 2019, one of the emerging trends throughout the entire year and particularly heightened in October was the inverse relationship between lowered claims figures and increased bodily injury. Comparing the months year-over-year, 2019 saw 7.1% growth in severity, while, in 2020, that figure rose to 12.7% despite the fewer miles driven. 

Naturally, the onset and continuation of a global pandemic will profoundly influence consumer behavior, including driving patterns, creating new challenges for the businesses that are so closely related to such behavior. However, from those challenges, pandemic-led transformations such as enhancing virtual claims capabilities have shown how the industry can adapt and improve. 

Adapting to Tackle Future Disruption 

While telematics has been around for years, 2020 and the pandemic brought a new sense of urgency to better understanding driving behavior. For insurance carriers, leveraging telematics and deploying usage-based insurance programs provides an incredible solution to accommodate changing driving behaviors. By way of stronger analytics and timely data reporting capabilities, telematics programs assist in taking the guesswork out of how to accurately calculate the risk propensity of an individual. 

As drivers continue to show interest in pay-per-mile programs as part of fluctuating driving patterns, telematics and usage-based insurance (UBI) programs give consenting consumers the opportunity to be priced more accurately than a traditional risk pool would dictate. This can increase customer satisfaction and allow an insurance carrier to be a competitive differentiator with a way to stay ahead of the curve of future disruptive events. 

The same can be said for almost all data or analysis during this strange but insight-full period of history. Understanding the motivations and connections between such events and human behavior will highlight both vulnerabilities and opportunities to grow. The pandemic will continue to affect virtually every market imaginable, not just now but for months and potentially years to come. The important aspect to consider is how to best adapt and evolve for the road ahead.

How Insurtech Thrived in the Pandemic

The past year has provided unexpected challenges and opportunities across all areas of the insurance industry because of the COVID-19 pandemic. As businesses were forced into lockdown, many carriers wondered how they would fare, because collaborative office environments and in-person meetings are crucial to delivering quality insurance service. However, through the adoption of insurtech solutions over the course of the year, insurance companies learned to adapt to remote work without sacrificing efficiency, productivity and collaboration.

By using virtual platforms that incorporate the kinds of features and tools demanded by the reality of working remotely during a pandemic, the insurance industry has learned to benefit from increased global access and collaboration. The normalization of digital platforms and tools has increased the interest of digitizing the entire insurance industry, accelerating efforts. Having seen their effectiveness in action over the past year, carriers are seeking out more insurtech partnerships than they would have previously. 

Similarly, technology companies are increasingly developing insurtech solutions that improve the customer experience while also introducing new advantages. “The tech community has had time in last couple of years to understand what insurtech is and is now starting to approach [the insurance industry] with ideas that aren’t about customer engagement; they’re about new risk spaces or entirely new verticals, or they’re about reducing risk in the first place,” said Stephen Brittain, director and co-founder of Insurtech Gateway, at Insurance Innovators USA. The current environment brought about by COVID-19 has served as a catalyst for insurtech innovation. The insurance industry is likely to focus on insurtech strategy and partnerships well beyond the pandemic.

Digital claims management

Previously, insurance carriers looked to partner with technology providers to help streamline internal business processes. However, there has been a growing focus on how technology can help insurers deliver customer-centricity. In many cases, the accelerated adoption of new technology by insurance carriers has facilitated remote processes for both insurance adjusters and customers. Due to the pandemic, 90% of insurance claims are now processed virtually. Insurtech software simplifies this process, allowing customers to upload relevant information and photos of their property or auto claim and providing adjudicators with augmented reality (AR) and virtual reality (VR) tools to corroborate claims and increase accuracy and efficiency when analyzing damage off-site. 

Additionally, the digitization of claims management allows carriers to use artificial intelligence (AI) capabilities to identify and prevent fraud. With more customer and claims data available, insurers can leverage AI algorithms to compare similar losses for discrepancies and develop systematic business practices that save time and money. 

Customer-centricity

While digitization can help carriers automate processes, it also primes customer’s high expectations of immediate service. The insurance industry is hyper-focused on the customer experience and delivering consistent service. Insurtech solutions enable transparent customer communication and user-friendly platforms, including comprehensive consumer portals and touchless claims capabilities. Insurance carriers that expand collaborations with insurtech providers are more likely to produce exceptional customer engagement and are better suited for growth as the legacy industry adopts the digital platforms found at the foundation of these new insurtech systems. 

See also: Role of Underwriter in Age of Insurtech

The digitization of the industry allows insurers to craft an end-to-end experience for the customer, tailoring seamless digital and virtual processes to their personal needs through integrated insurtech platforms. Carriers can provide real-time status updates and improve productivity of field adjusters through mobile applications and optimized scheduling features, completely automating processes for increased efficiency. 

The future of insurtech

This past year has been a time of impressive innovation throughout many business sectors. While many argue that insurance is becoming less visible to its consumers, insurtech providers are imagining new ways to rebrand the industry and reinvent the market. The integration of insurtech tools provides a positive spin on the industry as it progresses with technology and the user experience in mind. Big insurance companies and brokers often look to gain efficiency from new partnerships, seeking collaborators who can bring about new distribution, enhanced customer experience and novel insurance solutions.

Today, technology innovators outside of the insurance ecosystem are providing valuable insight and producing structural changes with tools crafted to drive insurance goals through data-driven insights that inform evolving business practices. Insurance carriers play a big role in helping insurtech startups thrive after this past turbulent year. These companies are building a road map for a new view of insurance.

“It is really difficult for carriers to reimagine the industry,” says Peggy Klingel, director of startup engagement for Allstate Insurance. “It is important that we support startups because we need the insurtech ecosystem to bring their invaluable perspective on the industry and where it can be improved.”

Providers can benefit from the insurtech ecosystem by investing time, providing feedback and professional mentorship, as well as capital so that innovation can thrive. In return, well-supported technology startups can craft comprehensive solutions that align with insurance carriers’ policy and claims processes to deliver a valuable, fully integrated system to the end user.

Beware the Grey Swan

As the U.S. steadily emerges from the pandemic — and we all hold out hope for India — the temptation is to dismiss it as a one-off, a once-in-a-century health disaster, a black swan. But the pandemic is actually what’s coming to be known as a grey swan — something that, while rare, relates to a known problem and that can be planned for, if we come to grips with the cognitive biases that blur our ability to see them.

As we’ve learned the hard way over the past 20 years, there are a lot of grew swans out there, so we as an industry need to learn to prepare better for them, both for our own sakes and for those of our many clients.

This report from Aon on dealing with grey swans’ effect on corporate reputations includes a daunting list of those that have been broadly ignored over the past two decades, starting with the 9/11 terrorist attacks — which somehow caught the world by surprise even though Islamic terrorists were known to want to strike in the U.S., even though plots had been uncovered to hijack and crash planes into high-profile targets or blow them up and even though terrorists had attacked the World Trade Center itself and tried to make it collapse eight years earlier (right across the street from my office at the time).

The dangers that a hurricane posed to the levees in New Orleans were well-known long before Hurricane Katrina devastated them. So were the perils of subprime mortgages — a member of the Fed’s board of governors saw the crisis coming so far ahead of time that he published an alarmist book in 2007 yet was largely ignored until after the Great Recession of 2008-9 began. The tsunami that caused the disaster at the Fukushima nuclear plant in 2011 was eminently foreseeable. And, of course, many had been predicting a pandemic for years before COVID-19 pretty much shut the world down starting last spring and killed millions — Bill Gates even got most of the particulars of COVID right in a dire TED talk in 2015.

Why do we keep missing these grey swans?

Drawing on the seminal work of behavioral economist Daniel Kahneman, the Aon report lists six cognitive biases that cloud our judgment on risks more complicated than “white swans” — which are common enough that we have clear data on them and routinely incorporate them in our risk management.

The biases are: the ambiguity effect (our minds don’t like options with unknown probabilities); normalcy bias (we underestimate the likelihood and severity of disasters); optimism bias (we underestimate the probability of being affected directly); the ostrich effect (we ignore negative information to avoid the anxiety that comes with decision-making); herd instinct (we align with the behavior of a group to avoid conflict); and status quo bias (we prefer to keep doing what we’re doing).

As the report explains, the ambiguity effect, normalcy bias and optimism bias “relate to our limitations as natural statisticians. We gravitate toward information that we can process and organize [while avoiding]… uncertain, ambiguous data…. To help us navigate through the storms of life, we tend to be optimistic about our chances. Despite knowing the health risks associated with smoking or obesity, for example, we believe that ‘it won’t happen to me,’ yet we buy lottery tickets equally believing that, ‘it might be me!'”

The ostrich effect, herd instinct and status quo bias “relate to managing our emotional state. Evidence that conflicts with our rosy view of the world is uncomfortable and unpleasant…. It is easier to go along with the majority than stand one’s ground and cause waves.”

So, how can we do better?

The report’s conclusion: “Effective risk management strategies will acknowledge these flaws openly and institute measures to combat their most harmful effects.”

It suggests considering, in particular, the possibility of “a large-scale cyber attack with physical consequences. Cyber physical risk is not new, but its threat is growing rapidly, as adoption of the Internet of Things (IoT) accelerates and increases the ‘attack surface’: the number of connected systems and devices through which an attacker can enter or extract data.”

That kind of attack certainly seems plausible — as the SolarWinds attack by Russia showed, nation-states have the ability to sabotage each others’ infrastructure, such as electric grids, pretty much whenever they want.

The report adds: “We could turn our minds also to the ‘green swan,’ the term coined by the Bank for International Settlements to describe black swan events related to climate change.” It’s always hard to trace a disaster to climate change — some will say the recent Texas freeze may stem from climate change’s tendency to cause more extreme weather; some won’t — but the likelihood of green swans is certainly increasing.

One caution: I think the evaluation of disasters after the fact is often Monday morning quarterbacking: “It’s obvious that we should have punted/shouldn’t have punted,” “should have passed/should have run,” “should have seen that that player would be a star/a bust,” etc. You can’t just prepare for one grey swan and hope that’s the one you should have headed off. You have to prepare for all the grey swans you can imagine — you don’t just fix the levees in New Orleans; you prepare for what hurricanes might do up and down the Gulf Coast.

That can be expensive. So, there has to be some real calculation involved based on the odds of an event, the likely cost of a disaster and the expense associated with avoiding all such problems — and the nature of grey swans is that none of these figures are easily quantified.

All we really know for sure is that grey swans are occurring faster than we’ve expected and have been far costlier — COVID-19 has cost trillions of dollars in the U.S. alone, and the devastation in terms of lives lost has been even greater. So, we’d do well to confront our biases and keep trying to make ever-more-realistic evaluations of the risks we’re facing.

Stay safe.

Paul

P.S. Here are the six articles I’d like to highlight from the past week:

How Social Inflation Affects Liability Costs

The industry is probably looking at several more years of accident year combined ratios above 100%.

The Future Isn’t What It Used to Be

Customers, risks, operations and the workforce all have been transformed over the last year. This makes strategic planning a challenge.

How Geospatial Data Lowers Traffic Risk

The cadence and granularity of data about travel behavior need to be enhanced. Geospatial analytics can be the engine.

A New Environment for Insurers

Environmental, social and governance (ESG) is a chance for the insurance industry to do well by doing good.

The B2B Digital Payment Opportunity

As trends point to rapid adoption of alternative payment methods, insurers must determine how to meet B2B needs.

Long-Haul COVID-19 Claims and WC

Employers and workers’ comp carriers must tread lightly; accepting a COVID claim can have a big impact, beyond the initial care and recovery.