The coronavirus (Covid-19) pandemic has had a major impact on consumer's behaviour and many insurance companies, insuretechs and brokers have had to adapt to this change quickly and decisively.
Funding has helped some businesses to adapt to consumers’ new demands. However, government loan schemes such as the Coronavirus Business Interruption Loan Scheme (CBILS) are not available to every business. For example, businesses only qualify if they have an annual turnover of up to £45million.
So, where does this leave new companies, those that don’t qualify and those that decide not to take the government up on any of the business rescue packages?
To survive, many have had to change their business model or embrace technology to adapt. Here’s how some have managed to survive and pivot:
Digital Risks recently adapted to the crisis by rebranding to Superscript so that they could offer more to SMEs. They provide a monthly subscription cover, flexibility and complete transparency with their insurance.
CEO Cameron Shearer told insurancetoday.co.uk that it was important to adapt as business activities pivot. He added: “These requirements were always important, but they’re now even more so as SMEs face some of the most challenging business conditions out there."
Investing in technology:
When the government asked companies to let their employees work from home not all were prepared for this. According to a survey conducted by Studio Graphene, only 39% of companies already had the technology in place that made working from home possible. The majority of the 900 companies that were surveyed had to find ways to create a remote environment. Companies had to pay for new hardware and software. While some of the larger businesses were more able to cope, this put a lot of pressure on some smaller businesses.
If you don’t have it, buy it:
Building the technology from scratch can be cumbersome, expensive and time-consuming. So, if there’s a company out there that already works the way you would like to or that has the technology you desire it’s always possible to snap it up. That’s exactly what Direct Line Group (DLG) did when it bought Brolly, a UK digital insurance app. When asked about this acquisition by Insurance Times, our very own chief executive Adam Bishop, said: “It’s only natural that a bigger incumbent player will buy that value, as the costs of building such a platform and establishing that all-important digital culture could be significant.”
Pivot to offer an alternative product:
During lockdown the sharing economy has been badly affected. As a result, companies that catered to businesses such as AirBnB and Uber were impacted too. But some were able to adapt. Pickl, for instance, initially offered insurance for AirBnB hosts but it has recently launched an MGA in partnership with First Underwriting to offer property and vehicle products.
Coronavirus has forced many businesses to modify their structures and services. But not all insurance businesses have had to change their ways to survive during the pandemic.
One such fortunate business is By Miles, which offers pay-per-mile car insurance. This offering worked in the insurtechs’ favour as it provided greater flexibility for motorists that were driving less during lockdown.
Another example is Bought by Many. It is a UK pet insurance company for dogs and cats, which has seen more demand following an increase in the number of people buying pets for company during lockdown.
Some companies have been lucky or savvy enough to offer the right product at the right time. If yours is not as fortunate it’s still possible to make changes to adapt and thrive – even in the midst of a pandemic.