Corona and the rapid digitalization
The corona crisis presents insurers and brokers with significant challenges. Because often the digital competence to enable the home office for all employees is missing. Those affected should now learn from this, recommends our managing director Ingolf (Putzbach) in his guest article at Pfefferminzia.de
Two ingredients make an ominous cocktail. Firstly, many insurers are technically unable to provide external access to their systems. If employees are not sitting at their terminals in open-plan offices, operations collapse and customers learn new criteria for selecting insurers.
On the other hand, the corporate culture is not designed to function without the established management structures. After all, it is not enough to have laptops and a powerful Internet connection to work from the home office. The organization of work must also be geared to this. Those who do not give their employees the opportunity to organize themselves in powerful teams during normal operations are surprised at the loss of productivity in the current situation.
In any case, the hour of management is now. In addition to many organizational aspects, crisis management also includes, above all, the right approach to employees and customers. The former must be given the feeling that the bosses have everything under control. But they also deserve honest communication about the possible economic effects of the shutdown, because many families are already acutely threatened by loss of income.
And the customers? After all, almost all insurers have now managed to integrate a Corona information box on their homepage. But is that enough? Wouldn't you expect a bit more from your insurer? Now proactive customer communication has never been the strength of the industry. And sending letters is expensive. It would be nice, of course, if you had established digital communication channels to your customers and they agreed to be contacted.
Fortunately, in many cases you can rely on the tied agents and brokers who at least call their VIP customers and offer support. How many customers in Germany have probably received such a care call?
Now we come to the freestyle for good managers. Winston Churchill, arguably one of the best crisis managers of all time, is credited with the quote: "Never let a good crisis go to waste." In this sense, good management is characterized by taking advantage of the crisis to make long overdue decisions and, with regard to the insurance industry, finally turning the wheel and steering a consistent course of digitalization.
Amazon is currently expanding its dominant position in retail, while many of the remaining retailers are on the verge of insolvency. And in the insurance sector there are also players like Check24 whose business model is not being challenged by the crisis.
Those who sell online and over the phone are not restricted by contact bans, but 83% of brokers suffer from the cancellation of customer appointments and 43% are already recording sales losses (according to a survey published on 27.03.20 by Professor Beenken, FH Dortmund).
More than 25 years after the beginning of the commercial use of the Internet, perhaps the time has come for the insurance industry to change course.
With modern digital platforms, both insurers and brokers can automate a large part of their business processes. Thanks to open interfaces, clerks and sales staff can access the systems from anywhere in the world and at any time. At the same time, access can also be granted to customers, making self-service possible, as has long been self-evident at Amazon and in other industries.
And Check24 and every other broker could also offer customers self services, which would lead to enormous savings in administration if there were more insurers with modern systems.
Now also brokers are anything but champions of digitalisation. The willingness to invest in IT has never been very pronounced and technological skills did not play a role in the selection of insurance partners. A lack of digital competence also leads to the wrong decisions being made when selecting software solutions. The standard software available for brokers, the core of which is often more than 20 years old, cannot meet today's requirements despite updating efforts by the manufacturers.
sum.cumo has made a name for itself since 2010 as a service provider for the construction of completely digital insurers. The software products SCIP Core for modern administration and SCIP Sales for sales and service are also a possible basis for corporate digitalisation for brokers. With the "Digital Readiness Assessment", sum.cumo offers every market participant the chance to clarify the digital status and develop a suitable digital roadmap. sum.cumo is also "open for business" in the lockdown. The more than 160 members of the sum.cumo crew are all working in the home office without any loss of productivity, and sum.cumo's customers are fortunately doing just as well thanks to digital business models.
From what we know today, Corona will lead to a digitalization push not only in the insurance industry. From a consumer perspective, this is probably the only positive thing about this pandemic, which is shaking our economic and social order in a way that no one would have thought possible.