2020 is the year when everything changed. Can the life and pensions industry learn any useful lessons from this most disruptive year?
The world is never going to be the same again after the COVID-19 pandemic. Scenarios that seemed very much the preserve of science fiction films have played out in real life across the globe. Individuals and organizations have seen their fortunes change in the most unexpected ways. Back at the start of 2020, who could have predicted how the fortunes of city centre coffee shops and face mask manufacturers would contrast so markedly later in the year?
The impact of this experience will be felt for years to come. There are likely to be fundamental shifts in what we as a society view as important, and in our preferred ways of working, socialising and communicating. The same holds true for the customer journey that defines business dynamics to a greater extent.
What this means for the life and pensions industry will be fascinating to observe. Will the uncertainties of the past year mean that people adopt a more cautious attitude and invest more funds in legacy products for future unknowns? Or will this reminder of their own mortality would lead people to adopt more of a “live for today” attitude and place more emphasis on short-term spending? At this stage nobody can say for sure, but there are already useful lessons we can be taking from the experiences of 2020- the most obvious being, enterprises now need digital solutions.
One of the few positives of the pandemic has been that it has served as a wake-up call to many people. It has made us reflect on what is really important, and how precious our time is. The ability to look at things anew and reassess is a very useful tool, and one that both organizations as well as people can gain great benefit from. This also increases the chances of better acceptance of digital solutions even by the most old school enterprises and customers.
The life and pensions industry is like few others. Not many industries sell products that the customer owns for decades and becomes increasingly interested in as the years pass by. Having such a long-term relationship with the customer can bring many benefits, but it poses challenges all throughout the customer journey as well. Sometimes this long-term continuity does not encourage change or innovation that could benefit both the customer and the insurer.
A product that was designed 30 years ago must have been designed keeping in mind a very different customer journey for an environment very different from the current one. The IT solutions available, product documentation and customer expectations 30 years back were vastly different from those of today. Considerations such as simplicity, clarity in communication and value for money that we presently prioritize may not have been so important back then.
For this reason, it is crucially important for insurers to keep these legacy products under review and to continuously seek ways to improve and innovate with them. Things should not just be done a particular way “because it has always been so”. Does the product have complex rules that can be simplified? Does the customer have clear information easily available to them, and that they do not have to seek out? Digital solutions are key here. As well as improving the customer journey and making efficiency savings, such improvements may also create opportunities for the insurer to obtain further business from the customer.
COVID-19 has unleashed colossal change in the world of work. A huge range of employees across organizations have taken ownership of issues and devised creative and agile solutions to adapt. At times what was believed to be impossible has been found to be possible. The insurers that are likely to thrive in this new world are those that can harness the wave of creativity. The creativity that has emerged across their business and can be used to reconsider the products and services they offer. If you work in the industry and have suggestions, make sure your voice is heard!