The impact of Covid-19 on insurance market leadership in Latin America
According to a study by Russell Reynolds Associates, the sector could emerge stronger from the pandemic by investing in new products and technology
The Revistsa Apólice article, "The impact of Covid-19 on insurance market leadership in Latin America," features findings from a Russell Reynolds Associates study on the topic and quotes Consultant Fernando Machado. The article is excerpted below.
The pandemic showed that almost no company around the world had contingency plans that included safety protocols for a health crisis. This required leaders to make quick decisions. This scenario is clear from the results of the study, “The impact of Covid-19 under the leadership of the insurance market in Latin America,” carried out by the consultancy Russell Reynolds Associates.
The study includes interviews with more than 25 insurance industry leaders, in order to understand emerging market trends for post-pandemic Latin America. In the conversation, the leaders highlighted the skills needed to navigate these uncertain times and the actions that insurers are taking to assemble teams ready to compete in these markets. Among the executives interviewed are representatives of regional subsidiaries of multinationals, independent insurers, insurers owned by local banks (bancassurance), as well as local and international insurance and reinsurance brokers.
One of the trends pointed out by the study is that, due to the health crisis, many consumers are more open to learning about insurance protection products (for example: life, health, residential). Because of the drop in the average income of the population, people are also looking for more economical products. According to Fernando Machado, a Russell Reynolds Associates consultant, insurance companies that invest in advertising campaigns and in the development of new products can attract this audience. “Even with the population earning less, there was a high perception of the need to be protected. It is at times like this that insurance is essential, so we must spread the knowledge about its benefits."
Another point addressed in the research is the high digitization of the sector. With social distance, insurers had to develop new ways of communicating with policyholders, being forced to invest in digital channels. Some organizations are deploying on-demand platform models, taking advantage of websites and social media. “I believe that, even in the post-pandemic, the insurance consumer will still not acquire a policy only online. However, the processes will be, more than ever, digitized and this will bring an increase in productivity in companies, which will be able to use the time spent in bureaucracies to focus on other aspects,” says Machado.
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