Like many other industries, the current COVID-19 pandemic will have profound and lasting effects on the insurance sector. Our industry faces many challenges in dealing with the current crisis, ranging from continuing to serve customers to managing the negative impact on balance sheets. However, there are also opportunities going forward to accelerate the digitalization of an industry that has been slow to transform. As people and businesses have a more acute sense of their vulnerability, research shows that interest in insurance protection of various types will be in far greater demand. The protection gap which has continued to increase is now painfully felt and many are experiencing first-hand the resulting hardship from the financial risks which have become reality. Given the sluggish pace of transformation in the industry so far, some market participants are unable to respond to this demand. As a result, they have seen their sales negatively impacted by the confinement measures, especially those which rely on face-to-face sales and manual underwriting processes.
Who will be well positioned in a post-pandemic world?
Within the industry, who will thrive and who will struggle? Like everywhere, it is a relative game. The pandemic is another disruptor for the insurance industry and will further reshuffle which companies are best positioned for future success. While this is the case outside of insurance, what is truly unique in our sector is how disparate the challenges are compared to the opportunities. For some players, the current focus may be on their in-force portfolio addressing higher claims, lapses and the overwhelming challenge of all-time low interest rates. Legacy systems and operational setups add to the challenge and improvements may continue to be further delayed due to cost pressure and the reduced capacity to make the necessary investments. While new opportunities exist, management may need to focus on dealing with the current stresses rather than aggressively modernizing to respond to new customer demands.
iptiQ: the new kid on the block
For a digital B2B2C platform such as iptiQ, we have the ability to see the picture a bit differently. As well as being the “new kid on the block” with streamlined and omni-channel application processes, we have also gained some valuable experience over the past four years, with meaningful new business volumes written globally. With a business model based on strong partnerships to provide digital insurance solutions via insurance carriers, retail brands and other distributors, iptiQ aims to make insurance products more accessible and affordable for people globally.
Through iptiQ’s innovative front-end platform, it has already simplified the customer journey in many markets, and is ready to meet new customers’ needs thanks to its flexibility to support sales across all channels, digitally and on the phone, and leverage data to accelerate the application, identification and underwriting process. With a shorter product development lifecycle, iptiQ can quickly add new products across its broad network of distribution partners.
An opportunity to address the protection gap
Once ultimately resolved, the pandemic will leave greater demand for insurance processes based on efficient sales and underwriting. iptiQ is well positioned to support the digital transformation of its distribution partners, helping them meet this demand and access new revenue streams.
In addition, iptiQ avoids the balance sheet volatility which presents a challenge to the industry overall. Its focus on protection products means that the business is not as exposed to ultra-low interest rates, asset volatility and significant changes in capital requirements from changes in reserves. iptiQ has a light balance sheet, state-of-the art systems to support all sales channels and serve its existing customer base, as well as a strong network of resilient partners which access new customers.
Swiss Re created iptiQ to respond to the need of the insurance industry to accelerate its modernization through technology. We have seen early successes through its rapid growth. Now we see COVID-19 as a catalyst to this transformation. iptiQ is ready to deploy its solutions across a wider range of partners to reach even more customers and help close the protection gap.