The Vice President-Insurance Brokers Association of Ghana, Shaibu Ali, has indicated that the coronavirus pandemic has crippled the insurance brokerage industry – hitting the labour sector hardest in terms of job losses as a result of the absence of a contingency plan.
According to him, the outbreak of COVID-19 has threatened lives of staff, customers and business partners with the attendant interruption of work, loss or disruption of insurance brokers’ normal business operations- to such an extent that it poses a threat to their existence.
“The occurrence of COVID-19 re-emphasised the need for insurance brokers to have a detailed contingency plan as a reference tool for the actions required during or immediately following an emergency incident like COVID-19. A responsive plan will help ensure the continuation of business and thereby minimise the impact on business. This is something that most brokerage firms did not have, and had to urgently create for the occasion,” he said.
Mr. Shaibu Ali was speaking during the fourth edition of the ongoing Webinar series organised by Krif Media Limited, publisher of Integrity Magazine. It was on the theme ‘The Impact of COVID-19 Pandemic on the Insurance Industry: The Implication for Insurance Brokers’.
Commenting on digitisation of operations, Mr. Ali indicated that most insurance brokerage institutions were not digitally ready before the pandemic set in – because most firms believed this to be a long-term project and have been looking at ways of starting or increasing their digitalised operations. However, the pandemic forced them to develop a robust online platform within days, which increased cost of working.
In addition, he stated that insurance brokers now see the need to partner with IT firms to source leads, process applications, and further accelerate the shift to digital and direct distribution that will aid in reviewing digital capabilities.
“COVID-19 might just prove to be the catalyst for innovation in insurance broking; unlocking greater levels of customer experience and personalisation using the digitised space. As a result of the situation surrounding COVID-19, there is a unique opportunity for insurance brokers to rethink and innovate as they adjust and respond,” he emphasised.
Mr. Ali advised insurance brokers to focus on customer support, as this is the time to prove the value of the relationship model.
Chief Executive Officer-Glico Group, Edward Forkuo Kyei, speaking on the same platform stated that the goal of every insurance company is to be in a state of readiness to meet its liabilities in respect of the uncertain events insured. However, the events that have taken place in the past few months are a clear indication that many insurance companies were not prepared for the uncertainties and adverse effects a pandemic such as COVID-19 would have on their business operations.
On his part, he recounted the impact of COVID-19 on the insurance industry as follows: rising claims, with healthcare insurance recording significant increase due to anxiety, stress, depression, reduced human mobility and curtailed regular exercise among others; reduction in sales due to reduced business activity; cancellation and suspension of policies due to a nosedive in the economy forcing individuals and organisations to cut down cost; and increase in cost of operations.
He however advised insurance companies to respond at pace with the changing environment and adopt a customer-first attitude. “As we make our way through unchartered waters in this pandemic era toward a new normal, we can only focus and take advantage of the opportunities it brings,” he said.