Study reveals trends for the post-pandemic insurance market
The Revista Cobertura article, "Study reveals trends for the post-pandemic insurance market," quoted Russell Reynolds Associates Consultant Fernando Machado on the post-pandemic trends he is seeing in the Latin America insurance market. A translated excerpt of the article is below.
Post-pandemic trends regarding consumer behavior, sales channels, technologies and regulatory structures were analyzed in a study conducted by Russell Reynolds Associates in Latin America, specifically in Mexico, Argentina and Brazil. The study looked at 25 industry leaders and also showed what the role of the leader is in this new scenario: they will have to be more inclusive, innovative, digitally fluent and sustainable.
Russell Reynolds Associates partner, Fernando Machado, comments that the study reflects a lot the strength of the insurance market in the Brazilian territory. “Brazil is the engine of growth in Latin America, where things are a little more advanced, where it has bancassurance and stronger local players. What we have in this study reflects the Brazilian reality in trends for the post-pandemic insurance market,” he says.
Unlike other countries, in Brazil the broker channel is the stronghold in insurance distribution. “The first point that was transversal was the use of technology. At the height of the pandemic, everything had to be digitized. Brokers themselves realized the benefits of using digital channels and technology to improve the process. All the executives we talked to said that the broker channel is still important, but that they had to rethink their digital channel strategies.”
Digital and Technology
With the pandemic, insurers compulsorily, at first, invested to digitize their processes. “There was a greater use of technology and, in quotes, digitization. The relationship between broker and client remains a strength, but what we noticed in talking to insurers is that the direct channel, which was only used for price comparison, for some types of simpler insurance and that do not have complex clauses are being tested for the distribution through the direct channel, like the insurtechs. Even if their sales percentage is low, we are already starting to see an increase.”
The study shows that, in the long run, the main challenge faced by the traditional insurance market will be customer retention in the face of interruption of new innovative participants (insurtechs), while continuing to optimize processes. This will require a significant investment in advanced data analysis, machine learning and artificial intelligence.
The trend is for the world to move towards a hybrid model of work (office and home office). How do you lead part of the team in the office and the other part in the home office? How can we ensure that these groups receive the same treatment? Machado replies: “The leader will have to continue to develop this muscle, this competence, which I call inclusion. Having the ability to understand the situation of each one of your team members, bring them into the company and work on culture, performance, and delivery of results."
Machado says that he is participating in several high-level insurance management projects. “We see senior executives who are better prepared and those who are less prepared to face challenges. Either the company will have a personal development plan or it will have to hire from the market, or from another industry. This is happening, this is what I do in the insurance industry."
To read the full article, click here.