Mitigating natural disasters and disruption in the insurance industry
Unusual and unexpected occurrences – such as natural catastrophes or cyberattacks – can incapacitate businesses and significantly interrupt normal operations. Business continuity plans (BCPs) are key for optimal risk assessment and management; whether it’s financial, physical, reputation or any other business risk.
In the scenario of a natural disaster, insurance companies are likely to face significant challenges. We’ve listed some of the most common threats faced by insurers, with some potential solutions and suggestions to mitigate their impact.
Natural catastrophes significantly impact the financial performance of insurers and is therefore considered amongst the most noteworthy risks for a business. With governments and policyholders facing increasing insurance premiums, underwriters are called to re-evaluate their pricing strategies accordingly. In the words of Tom Herbstein, Insurance Specialist at the Department for International Trade: “The problem is that if you keep repricing risk in a world where exposure to risk is growing exponentially, you eventually reach a point where the cost of insurance is too high”
A second major challenge is characterised by the ability to manage time, workload and workforce appropriately during highly stressful and disruptive times.
Amid unexpected disasters, companies are putting all their efforts in either implementing a Crisis Management Framework – overshadowing daily operational tasks – or facing a surge in claims that challenge their operating systems. To emphasise the latter scenario, let’s just consider the effect of a hurricane or storm on the insurance industry. Storm Ciara that recently hit the United Kingdom, for example, brought a surge in insurance claims, with companies such as Aviva experiencing an increase of around 285% in telephone calls and claims.
A good example in support of the first scenario is the current Covid-19 pandemic, that led to the closure of numerous Insurers offices and call centres around the world. As a consequence, companies are now urged to immediately implement robust Business Continuity Plans, reducing their efforts to focus on BAU and instead requiring their focus to be placed on implementing large scale remote working operations at levels that are largely under tested.
In this difficult scenario, an aggravating factor is the level of distress and concern faced by policyholders who are experiencing unexpected loss and require a prompt and hassle-free customer experience.
How can you mitigate these challenges?
At RightIndem we believe that digital enablement is the key to thrive in such unstable situations. Insurance companies can benefit from implementing into their Business Continuity Plan a flexible IT solution that could be easily switched on and off when required.
By digitising the customer journey, insurers can make the claim process easy and hassle-free for customers, clients and brokers while automating key decisions and creating a single, straight-through process.
Implementing our digital solution to take control of the high-volume low value claims, will deliver numerous benefits, including:
- More time to manage complex claims
- Focus on your vulnerable customer
- Minimise call traffic by diverting claims to digital reporting routes
- Reduction in Opex costs
- Improvement in resource management
- Improved customer experience
- 3x faster turnaround to pay claims (7 vs. 21 days)
- 82% customer digital adoption
- 32% customer contact outside core office hours
- Increased retention
- Reduction in customer distress and complaints by simplifying the claim journey and allowing for 24/7 notification on any device.
If you need to ease the burden on FNOL, we are committed to helping you achieve your goals.
Integrating our Home and Motor disaster recovery on your website will divert call traffic quickly and alleviate the pressure from your call centres and claims departments.
Digital enablement is now perhaps more prevalent than ever and if we are able to assist you further, please do not hesitate to contact us.