How COVID-19 Accelerated a Digital Revolution in Benefits Insurance

For those of us in the insurance and protection industry, 2020 was a test of our noble purpose – to help people through the unexpected moments. Risk analysis, crisis planning, and helping people when they need it most are at the core of our business, and COVID-19 presented both a huge challenge and opportunity to change the ways in which we work.

Source: BenefitsPro - Karen Hoogensen | Published on January 13, 2021

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Handling the twists and turns this year has dealt wasn’t the biggest challenge for us, it was how to continue delivering on what we do. In this virtual environment, we were forced to figure out how to achieve the same outcomes by delivering our solutions and services in new and innovative ways. While this year taught us many things, two key learnings are paving the way for the future, particularly when it comes to technology investments.

The pandemic taught us what we can do from home. And it’s a lot more than we thought.

The impacts of the coronavirus pandemic have taught us we can do almost anything from home. Many of us are working remotely or attending school from home. We’re working out, visiting with doctors, listening to concerts, and holding happy hours online. We’re buying groceries, clothes, and even insurance from home.

Pre-pandemic, the experience of buying—and working—in insurance was largely face-to-face and involved a lot of paper and manual processes. The incremental progress we were making in digital investments was driven by changing consumer expectations and competitive pressures. Seemingly overnight, when the pandemic hit, necessity drove us to figure out how to do all things digitally.

Across the industry, insurance carriers accelerated long-debated technology plans. For example, an online application option for use in life insurance was quickly adapted for disability insurance products. And, the use of digital health records for underwriting was expanded because acquiring paper records signed by a physician quickly became less feasible, as did having an individual go into a client’s home for an exam or collection of fluids. Throughout the purchasing experience, we’ve made more things digital, including electronic signing and delivery of policies, electronic payments, and virtual client meetings.

Employees are even enrolling in workplace benefits from home through virtual benefit fairs and enrollment meetings. A recent survey commissioned by Principal® found that 37% of small businesses are allowing more employees to work remotely. And, one third of companies expect that 40% or more of their employees will work remotely 12 months post-pandemic. Increased levels of remote work is sure to be one of the legacies of this pandemic and is one of the many reasons the insurance industry has been prompted to accelerate digital investments.

The pandemic reminded us that we’re human.

This experience has taught us compassion, grace, and the importance of both the health and wellbeing of ourselves and our families. COVID-19 has fundamentally reshaped the way we view protection products.

In fact, two thirds (66%) of Americans say they now better understand life insurance’s value, with another quarter buying coverage for the first time. Awareness around the role of employers in providing access to these products has also increased. In a recent LIMRA study, one in four employees said they are more likely to sign up for certain benefits available through their employer.

Along with this heightened awareness of our mortality and morbidity comes the realization that we thrive on human interaction. We can’t take a digital-only approach. Bringing emotion—positive emotion and empathy—to the experience and every interaction we have with customers will help us get farther, faster.

Looking ahead: Technology for the future

As we continue to invest in technology across the insurance industry, we need to look for ways to make digital and human experiences work together for customers, employers, and financial professionals.

Many of our customers tell us they don’t understand insurance products and they don’t know where to start educating themselves. LIMRA’s 2020 Insurance Barometer study found that nearly half of consumers surveyed use social media to gather information on financial topics, companies, or financial professionals. And, in our work with more than 100,000 small businesses, we also often hear the internet is where consumers go to start researching benefits.

We need to give consumers and employers the ability to conduct their own research and educate themselves on the benefits of insurance. They need access to valuable information so they can feel more confident in their purchasing decisions. In turn, many carriers have created tools aimed at helping both consumers and employers identify and prioritize their needs. For example, at Principal, we’ve developed a tool that arms employers with the knowledge to build competitive benefits packages relative to other employers of similar size in their industry and geographic location.

Making it easier to share and exchange data is also increasingly important for the employer and financial professional experience. This includes finding ways to use technology to enhance connectivity with digital platforms through API-based integrations to streamline enrollment, quoting, renewal, and benefit administration.

The businesses thriving in this pandemic are those who have mastered the marriage of human and digital experiences. For insurers, ecosystems are emerging to provide customers with seamless experiences and full-service solutions. They’re erasing lines between competitors and, in some cases, industries. This is giving rise to entirely new kinds of go-to-market strategies, products, services, and companies.

With more employees successfully working remotely, we may also see more operations permanently move to work-from-home. This means helping employers protect against increased cyber risks. We found 64% of small businesses were concerned about data security and ranked cybersecurity as a top area in which they need guidance from outside professionals. And that was before the pandemic even started.

In the age of digital acceleration, we all need to use technology to find ways to make insurance more human. Too often, we let pricing, product competition, and spreadsheets lead us. Customers want to work with companies who care about them—and this was particularly important in 2020. Through all the twists and turns of the year, we’ve ultimately learned that customers need simple, personalized, and trustworthy experiences to put their financial goals within reach. Investing in technology that improves these experiences will set us up for success, even beyond the COVID-19 pandemic.