The coronavirus has reminded many organisations, including those in the insurance industry, that organisations that have a strong learning culture stand a better chance of emerging stronger from a crisis, says Ronald Tembo, executive manager at the Insurance Institute of South Africa (IISA).
This, he adds, is a view expressed in a research paper published by the European Journal of International Management, co-othered by no less than six researchers.
“According to this study, organisations with a strong learning culture maintain a better relationship with employees, suppliers and customers, leading to better financial performance,” says Tembo.
The lockdowns imposed by many governments around the world to contain the pandemic in their jurisdictions meant several businesses had come to a standstill, says Tembo.
“Many were forced to fundamentally alter the way in which they do business,” he says.
In the insurance sector, there was a surge in moving claims processes to digital platforms.
“New innovations suddenly emerged where a major part of the insurance value chain was migrated to online platforms. These included claims processing as well as client acquisition processes,” adds Tembo.
Insurance operations themselves suddenly found that they needed to review their business continuity models because a number of their products and services came under threat.
However, Tembo says forward thinking organisations were able to adapt relatively quickly, including reducing premiums for reduced risk exposures.
“There are many clients who are no longer willing to accept a pre-Covid risk rating as exposure to the same risk had reduced significantly.”
“A good example of this would be cover for vehicles where usage had declined considerably,” says Tembo.
“While it is near impossible to predict the nature and extent of the impact of a global pandemic, a business can factor in a level of flexibility, including the ability to restructure in a short space of time in order to continue to remain relevant to its market,” says Tembo.
Because of the nature of the work in an insurance organisation, much of it being intellectual property, companies are reviewing the size of the workforce that will need to return to the office post-lockdowns.
Consequently, there is a need to implement technology that allows off-site teams to work remotely, but also remain plugged into the system, as well as allowing information sharing between these remote teams, taking into account the requisite information security protocols.
Insurance companies are realising that there is an urgent need to upgrade their technology systems, including incorporating artificial intelligence (AI) systems that are useful in trends analysis as well as giving a sense of what the future might bring, on the basis of information available today.
“Companies are learning to appreciate the importance of the pace as well as the direction of change,” says Tembo.
“Other lessons from the pandemic included paying attention to basics such as removing ambiguity in the wording of policies.”
David Loughran, senior vice-president of product and chief economist at Praedicat, which offers business intelligence-transforming emerging risks into business opportunities, urged the insurance industry to move to language that is more affirmative, in the interest of creating more certainty.
“This has been felt across the entire insurance and re-insurers ecosystem,” says Tembo.
Tembo says the manner in which a policy document is worded can have severe legal and financial implications, “a potential make-or-break situation for an insurer”, explains Tembo.
“Lessons from Covid-19 are endless and we will continue to uncover more as the full impact of the crisis unravels, but the biggest lesson of them all is building organisations that have a strong learning culture which makes them agile and can easily embrace change,” he says.
