Page 37 - The Insurance Times July 2020

of claims for damage to property in the aftermath of limited virtual or mobile work station capabilities or unscaled
cyclone 'Amphan', which left behind a trail of destruction in communication technology. These traditional methods are
West Bengal and Odisha. At least 86 people were killed and often used for completing moderate to more complex
lakhs were rendered homeless after the cyclone battered a processing activities that require a team approach to
dozen districts in Bengal, including state capital Kolkata, on resolution. This situation is allowing for a significant shift in
May 20, 2020. the adoption rate of new ways of working, including the
supporting technology, which may change the ways
In Odisha the impact was little bit lesser. After cyclone organizations are run during post Covit-19 crisis.
'Amphan' caused widespread destructions in West Bengal
and Odisha, the insured losses from the calamity are Speaking of technology, the crisis could also be the spur to
estimated around Rs. 1,000 Crores. Lots of AOG Exposures look at moving more systems and applications to the cloud
like floods, earthquakes had taken place recently in Delhi, - an area that insurers have lagged other sectors in. With
Assam, Bihar, North Eastern States, etc. in India, giving more people working remotely, having systems in the cloud
terrific scars on the financial health of all the General offers much greater bandwidth and capacity than if staff are
Insurers. accessing on-premise servers remotely.

Be cautious about the cost-cutting response: This is an opportunity for the insurance industry and could
Clearly, this year could prove to be a difficult one for many be the catalyst for this movement. Actuarial modeling
insurers given the predictions of the economists, some of software, for example, often sits on individuals' computers,
which are saying that a "U" shaped or even a "W" shaped as there are deemed to be security issues with putting it in
recovery pattern may be more likely now (as opposed to "V" the cloud. But with today's cloud services offering enhanced
shaped). Early questions are starting to emerge around security protocols, perhaps the time has come for more of
possible recessions around the world. Why? We've seen such the industry to make the move.
varying virus containment efforts which dramatically impact
consumption levels on a local level and therefore impact More broadly, insurance businesses - as other sectors - need
speed to recovery. Expectations vary on the long-term to embark on the digital transformation of their
impacts; no one can be entirely sure. organizations, to become more agile, responsive and
connected enterprises. Perhaps one legacy of the
While it is tempting for insurers to suspend investment and coronavirus crisis could be that it actually propels more
cut costs in such a challenging financial year, I believe the insurers to do that. These are extremely challenging times
crisis creates an incentive for them to do the reverse - for individuals, families, businesses and indeed whole
continue to invest in how they operate and create a more societies and economies. The insurance industry has a key
agile, digitally-enabled business. In other words, now more role to play in supporting customers and societies through
than ever insurers should keep investing forefront in their the crisis and the recovery.
minds so that they can be prepared for the future.
While Summing Up:
By this it is meant firstly embracing the flexible and remote The decade 2020 and this particular year 2020 have begun
working that will be needed across all sectors due to the with a bang. The Corona Virus or the COVID-19 has shaken
virus, insurance included. The crisis provides the opportunity the entire world- whether it is a developing or developed
for insurers to test and ensure that their businesses have country or a rich, modern, well conscious and wealthy or a
sufficient connectivity to support more staff working off-site poor, having mostly uneducated clusters of citizen like our
and in flexible ways - now, and for the future too. nation.

What this means today is that management teams should World Health Organization- WHO- has declared the Corona
be rapidly assessing operational areas with high Virus as a Pandemic. (Epidemic is restricted to one
concentrations of human capital support such as call community or one country, whereas the Pandemic is spread
centers, claims, shared service centers, etc. to determine throughout the world.)
the impact. Business disruption or resiliency plans are being
tested stressed and in some cases derived. This is especially Now the questions arise- What is the role of the Insurance
true in areas where there is a lack of digital workflow tools, Industry in guiding the existing policyholders and new clients

The Insurance Times, July 2020 37