How can SMEs prepare for the challenges to the Insurance Industry in 2020?
With a plethora of challenges faced by the Insurance Industry in 2020, it’s important that SMEs make sure that their policies are up to date. You also need the right type of polices in place, so you will be well positioned to reduce your ongoing risks.
These challenges include the recent bush fires, floods and the COVID-19 pandemic, all of which have had a devastating impact on everyone, including the insurance industry and SMEs. How to address these disasters is one of the challenges faced by the industry in 2020, but there are also other questions that the industry needs to address. Understanding these issues will help SMEs prepare for the future and ensure that their policies are tailored to reduce their risks, regardless of any potential future disasters.
Challenges faced by the Insurance Industry
Many of the challenges faced by the insurance industry in 2020 focus on how to integrate legislative changes and reduced capacity into policy structures. It also includes streamlining insurance services to the community, as well as dealing with the complexity of the recent bushfires, floods and COVID-19 on the industry. Natural disasters are a topic that will be front and centre of the industry. This will likely mean that future Business Interruption policies will need to be reviewed providing clarity to both insurance providers and SMEs.
Legislative changes stemming from the Royal Commission being rolled out, compliance addressed and reinforcing the link between consumer and provider is another challenge. Continuing to improve customer relations will require a consistent message across the industry and is an area where providers will need to compete for business. Acting in the best interests of clients, becoming more customer-centric and remaining relevant to the community are all challenges that the industry is faced with in 2020.
In 2019, Lloyds of London was also faced with this same problem. They attempted to become more customer-centric by focusing on delivering higher quality risk protection and simplifying access to the global insurance market, all while lowering costs and making less complex claims easier to process. This should have been good for the industry, but now a year later, a reduction in capacity has proven troublesome to Lloyds, creating a trend that is constricting the market. Whilst some insurance providers have more capacity than a year ago, the industry as a whole is still confronted this. During 2020, providers will be looking to increase their capacity in a reducing market space and that’s very challenging for the sector. This means refocusing on customer engagement and acting in the best interests of the client. It also means adapting quickly and being receptive to changes. For SMEs, this is a positive result and one that should ease any concerns.
To discuss your current policy coverage and mitigating of risks for your business in light of these challenges, talk to Steven Thomas today.