Coronavirus: why it will accelerate insurance innovation

The pandemic is bringing out critical issues yet still presents opportunities, needs and possible solutions. The fear of the coronavirus will leave a growing need for protection and a new confidence with smartworking. New challenges can only be faced with exponential technologies. As it already happens in China

Published on 03 Mar 2020

Before and after the coronavirus. For insurance companies the emergency coming from China will represent a turning point, as the outbreak is bringing out critical issues but also opportunities, needs and possible solutions. 

In the general uncertainty caused by COVID-19, among fake news and real damage to the global economy, it is difficult to focus on the half-full part of the glass but, as the culture of innovation suggests, lessons to be learned also and above all come from crises and mistakes. Reactions and behaviours at the beginning of this decade highlight the weaknesses of a connected and complex society like the one we live in, but also new questions together with new possible social models that the emergency has imposed compared to the consolidated ones (from work organization to smart mobility and ecommerce). 

Fear, more or less justified, points to a growing need for protection, which remains the core business of the insurance industry. At the international level, the top management of large companies are questioning the need to review their risk appetite also on the basis of new models of disaster analysis. Furthermore, in the Far East, someone has already launched anti-coronavirus policies on the market. However, this is only the current case that requires the ability to deal with others, even less widespread and dramatic ones. 

Emergency brings to the fore the first thing to protect: the health. Many companies, even in Italy, have launched some anti-conavirus policies, which are often extended or ready-made health policies. However, traditional formulas are not always sufficient and sustainable in the face of “claims” of the size of an outbreak. In China, where it all began, Ant Financial, the fintech branch of the Alibaba Group, promptly proposed blockchain-based insurance solutions that drastically reduce the time (and cost of handling) of paperwork and settlement. Up to a thousand files per second were processed! New and increased protection can only be offered, in an economically sustainable way, by using exponential technology. 

After the coronavirus, insurance companies will have to accelerate their innovation paths, investing in the digitalization of processes and products to effectively and efficiently meet new protection demands. The use of Artificial Intelligence in policy factories, for example, will no longer be an exception. Digital health is an increasingly attractive and competitive front, as confirmed by the introduction of players such as Google and Apple: a great capacity of analysis is needed to face it successfully. It can only come from a wise use of algorithms and big data. Even viruses can be “anticipated” in their directions of development and growth rates, according to AI experts. Moreover, the smart management of data and information will allow the activation of services previously impossible or economically burdensome for companies and then for customers. 

Let’s finally think about the mandatory booming of home-office. In February, even in Italy, even those who previously did not want to and could not experience it. In many cases, especially in the service sector, productivity has not decreased far from the office. How will this new awareness impact on insurance companies, which are essentially service centres? On the one hand, the issues and opportunities of working at a distance can and must be addressed with greater enthusiasm and at the same time can (and must) deal with the effects that its spread will have on mobility (if I use my car less to move, perhaps I will need a more flexible policy …), for example, but also on the safety of those who work away from the company and the information it handles. The widespread cybersecurity will certainly be more complex. 


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Giovanni Iozzia

Direttore di EconomyUp, InsuranceUp e Proptech360, ha studiato sociologia ma da sempre segue la tecnologia. È stato direttore di Capital, vicedirettore di Chi e condirettore di PanoramaEconomy.

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