3 Ways COVID-19 Will Change The Insurance Industry Forever
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COVID-19 has drastically changed how consumers operate on a daily basis. With limited access to friends and families, restrictions from the quarantine may shape our future forever.
Here are the top 3 ways COVID-19 will change the insurance industry forever.
Working From Home Is The New Norm: While we will undoubtedly return to offices, how many people and the frequency of visits to the office will change. Many companies are rolling out schedules for their employees of when they can be in the office to limit exposure to COVID-19. We are also seeing many companies like Twitter move to remote working for 100% of their staff. This change will have a significant shift for the insurance industry because of one thing, less or no commuting. When you receive an auto insurance quote, one question you are always asked, if how far you drive to and from work each day. Imagine is that is 0 total miles and you only occasionally drive to the grocery store each week. People in cities may not even need a car anymore. There is potential for car insurance companies to generate significantly less revenue going forward.
Digitally Centered Consumers: Amazon’s stock has continued to rise for a reason. Instead of heading to Target, people are shopping online. This means digital security is more important than ever. With many companies having been hacked over the past decade and exposing their customers information, large corporations are paying premiums for insurance coverage. If e-commerce continues to be the primary ways consumers purchase goods, the need to ensure their customers information is safe and secure is paramount. We have even seen brands like Lay’s begin selling their products online having never sold direct to consumers before. This shift could potentially be big for the insurance industry.
Pent Up Purchasing Power: With the ability to book flights and take vacations or head out for a night on the town taken away, many Americans are saving money. This has led to want experts are calling ‘Pent Up Purchasing’. The money saved that was previously spent on frivolous things is now being spent on larger goods such as cars and down payments for homes. Both of these large purchases require insurance. So the increase in the total number of insured assets may rise as purchasing power reaches previous levels as jobs return.
What we know if that consumer behavior has changed and most likely will never return to its former self after COVID-19 is eradicated.
