June 1, 2021 3 mins read

How Financial Software Development Can Help Insurance Companies in the Pandemic

 

Ever since the Covid-19 virus has hit the world, the world has come to a standstill, almost. It is a known fact that every business across the globe has taken a blow due to the ongoing virus outbreak. The medical and technological industries have been giving their all to minimize the damage. And the Insurance companies are a backbone to these and overall, all the industries. Let’s discuss the significant determining factors that are influencing insurance management under the influence of pandemic:

• Financial Constraints: The effects on the economy – the expenses for battling the disease including health insurance policies, unemployment, the value of assets, and more.

• Health/Well-being Impacts: The virus’s fatality rates are substantial factors as humanity is adversely affected by the coronavirus’s epidemiological capabilities. It includes the declining availability of medical resources.

• Behavioral Factors: These factors include the activities of people, government, regulations taken to slow down the pace of the virus spread and revive the economy, and more.

How Insurance Companies are using Fintech Solutions for Combating the Pandemic

To understand the strategies followed by leading insurance companies for steering through the pandemic, let us discuss significant recommendations made by key speakers and leaders in the insurance domain worldwide.

• The cost-to-benefit analysis: Olivier Mahul, who leads the Disaster Risk Financing and Insurance Program, a joint program between the World Bank and GFDRR, suggests that the analysis helps in the financial cost of paying disaster insurance premiums.
The banking and insurance tools are suitable for various risks and dangers, yet the line between the risks is not very clear as it appears. A fintech solution can help to gather data for such an analysis and drive insights from it.

• Use of Insurance: Panos Varangis from the World Bank is reviewing the usage of insurance to finance natural disasters and pandemics. Considering the extremity of the current condition, he has questioned how the true insurance premium will be calculated and the payment’s accountability. Perhaps, there is a need for innovative health insurance policies backed by technology.

• Value of Insurance products: Simon Young from the African Risk Capacity (ARC) emphasis on insurance products’ value to the governments. He suggests that Insurance is not a single product but a complete discipline of risk analytics, and the ability to quantify risk matters a lot. Such a thing is not possible without technology.

• Claims adjustment process: Nikhil da Victoria Lobo of Swiss Re wants to focus on the claims adjustment process. According to him, it could affect the performance of the insurance companies financially. Actions can be taken to lower premiums by adapting to preventive measures. Technology has a significant role to play in this, and hence, financial software development becomes all the more critical for insurance companies.

Risk Diversification: Gunther Kraut of Munich Re stresses the importance of diversification of risk. He believes epidemic risks are something that all the insurance companies will be exposed to; hence diversification of risks is a must. The whole world is under the threat of Pandemic but is not insured yet, which presents an excellent opportunity for the tech-enabled insurance companies.

Another insurance procedure that could help society is Risk Modeling. The modeling helps notice the out and out pandemic circumstance and empowers the improvement for a regulation methodology.

How Insurance Companies are using Fintech Solutions for Combating the Pandemic

Parametric insurance is based on triggers. In this, the customer doesn’t have to provide proof that the event has occurred; and consequently, go through a lengthy claims process. Since there is nothing to verify, the insurer doesn’t need to spend resources and money on assessing claims. The data from technology-enabled devices, such as IoT sensors, does all the hard work and act as a trigger. Thus, it enables insurers to offer speed, convenience, and more personalized service.

 

Read more blogs:

How Can Banks with Digital Offerings Differentiate Among Themselves?

[eBook] Disrupt or Be Disrupted: A quick guide on how fintech companies are changing the financial services industry landscape

    March 17, 2021

    10 Fastest Growing Telemedicine Companies

    With the ongoing pandemic, digitalization has become a boon. The...

    March 17, 2021

    How Coronavirus Has Changed the Future of Banking Forever

    The outbreak of COVID-19 is having a massive impact on...

    March 17, 2021

    Why Prioritizing Digital Transformation is the Need of the Hour

    Digital transformation has redefined economies across the world by letting...