As we move into 2021, the insurance sector should expect continuing hard market conditions, according to Jim Bramblet, managing director-insurance lead for Accenture‘s North American operations, who explained the pandemic will shape pricing and coverage in the year to come.
“Carriers are going to have to continue to look at pricing vs. risk, and ask themselves what are the current consumption patterns for assets they typically insure,” he said, giving for example the number of rebates around personal lines seen in the past year. “What is that going to look like going forward?”
He added even outside the pandemic, carriers should think about changing consumption patterns for personal lines, given the revival in home improvement investments and “cocooning” trends. This makes it paramount that insurers find the right pricing for these fundamental changes in consumption patterns.
Concerning coverage, the past year exposed a gap in policies around pandemics and business operations. This is particularly true for business interruption claims, which might take a public-private partnership to cover.
“There has to be some collaboration between government and insurers, whether through primary insurance, reinsurance or a government backstop,” he said, adding more needs to be done than “waiting for relief packages to run through the government.”
As previously reported, the enormity of losses stemming from COVID is believed to be beyond the abilities of the private market to cover.
From consumer-facing technologies to in-agency systems, the pandemic has propelled the industry’s investment in digital tools, according to Bramblet, with spending on distribution and customer-facing tools showing the best ROI.
For the industry to capitalize on this, the transition from a digital environment to a more traditional insurer/policyholder connection should be seamless. Regardless of...