COVID-19 driven ‘organisational tsunami’ puts change top of insurance agenda

COVID-19 has forced the insurance industry to radically change the way that it does business – because it had no choice other than to change or die.

That was the main message to come out of a panel discussion on the topic of “Achieve Business Continuity in a Post COVID-19 World: Establish the Optimum Operating Model for Your Remote Workforce” at the Intelligent Insurer Claims Innovation USA virtual event.

The moderator was Cathy Ellwood, founder of Ellwood Enterprises. In her opening remarks Ellwood said that in her opinion no-one knows yet just what the optimum operating model will be when we finally emerge from out of the shadow of COVID-19, and that that was what excited her when she considered the topic for the panel.

She said that every single organisation that she has talked to agreed on one thing – that the insurance industry, like the general world, is now going through something that no-one had previously thought would happen, because no-one thought it was possible. What impressed her most was the fact that the pandemic has proved that people really can change.

According to Ellwood she has heard a lot of frustration from senior executives with leadership teams and organisations due to their inability to change in normal circumstances, right up until the moment that COVID-19 hit, whereupon everything changed almost overnight. She ascribed this ‘organisational tsunami’ to the simple fact that they had no choice but to change if they wanted to stay in business.

“Bureaucracy was thrown out of the window,” she said. “Teams became more agile, more flexible. They aligned on things they had never aligned on before. And to some extent everybody had to learn how to do things differently. They were forced to stop doing what they did best – micromanagement. After all, how can you micromanage your colleagues when everyone’s working from remote locations?”

Change and opportunity

Shawn Crawley, SVP claims, Sompo International was supposed to be on the panel, but was unable to make it due to loss of power from Hurricane Zeta. However he talked to Ellwood before the panel was scheduled and underlined the fact that the insurance industry has never experienced anything like this before and that it was important to be a part of the leadership team that helps to shape the future of how claims are dealt with, seeing this as a major opportunity to prove that companies don’t always have to do things the way they always have.

However, Paul Stachura, chief claims and risk engineering officer at State Auto Insurance Companies, David Fineberg, head of claims at Generali and Reshma Mani, senior director, Product Management Claims at Guidewire were able to make the panel.

Stachura said that COVID-19 had indeed been a curveball that had been thrown at the industry, leaving it with limited time to prepare or react. State Auto carried out an immediate transition to working online within 48 hours, using technology to its fullest extent that included online meetings.

“What surprised me the most was the ability to immediately react to the crisis and to continue to conduct business as usual,” he said, adding that the company had also had to recognise that not all of its clients had been able to react as quickly. However, he said that the changes that the Coronavirus has forced on the industry would benefit both insurers and clients, with more flexible use of technology and also a better awareness of issues.

Fineberg agreed that the industry won’t want to return to the old pre-COVID-19 ways of doing business and that apart from some hiccups in the first week Generali had also moved into the new working paradigm forced on it by the pandemic.

He thinks that there’s great optimism for innovation and how the industry might work in the future, with some of the great icons and institutions of the industry, like Lloyd’s of London that have existed for hundreds of years, suddenly being forced to change.

Mani also said that her company had made the transition successfully and had treated its employees well, with stipends being sent to them to enable them to set up a proper working from home environment that included not just a computer but also a desk and a chair.

“I’m part of the product management team,” she explained, “And one thing that’s important is for us to be able to collaborate in a room with a whiteboard. We moved to virtual conferencing with virtual whiteboards.” She stressed the need to be flexible in coping with all of the challenges thrown up by working from home, like juggling personal and business needs.

The panel agreed that the coronavirus will lead to substantial changes to working practices. As offices have been shut down it’s been shown to be possible to successfully work from home, something that should be allowed to happen after the pandemic is over, not least because online working allows for a greater diversity of employees in more geographical locations.

In addition, they all agreed that the pandemic can allow for greater communication with clients that can show how much empathy the insurance industry has in times like this. They concluded that the industry should treat COVID-19 as an opportunity to change towards better business practices, and not as a threat.

To watch the full session on-demand  click here to visit the Claims Innovation USA virtual event website.