The coronavirus pandemic will force the insurance industry to embrace digital, according to research from the Cass Business School. It also suggests the pandemic has underlined the value of having a chief risk officer to navigate strategy and identify opportunities.

The rapid acceleration of COVID-19 has,argues the report, Risk, Strategy and Digi-Change and the Role of the CRO, brought about a wholescale change in working practices for insurers, with speed and efficacy of data increasingly important.

Authors Sarah Ruberry and Dr Cormac Brycr found that insurance organisations often prioritise inward-facing, prescriptive digital strategies to the detriment of an outward-facing integrated strategy to target upside risk.

The research, which was based on a survey and interviews across nine different-sized insurance companies, found however that one in three CROs were either not looking at digital change – the implementation of insurtech and other data-oriented digital initiatives – or not implementing it.

The authors recommend that insurance and reinsurance firms should focus on transforming the traditional perception of risk as the second line of defence into a value-identifying ‘second line of opportunity’. They also suggest firms need a CRO more than ever and that there should be a greater focus on realistic stress test and scenario planning that considers the possibility of a potential second COVID-19 outbreak and susceptibility to future pandemics.

Ruberry commented: “A year ago, the insurance industry would have dismissed the idea of a wholesale working-from-home model and new business not needing to be conducted in person.

“COVID-19 has created an opportunity and a paradigm shift and similarly, insurers should refocus their 'digi-change' lens.”

Share Story: