The war could cost insurers dearly – Economy

Insurers have survived the coronavirus pandemic comparatively well, but they cannot breathe easy. The war in Ukraine will continue to have a significant impact on the industry and could become dangerous for suppliers: on the one hand, there will be high insured losses, for example because Russia does not return leased planes to their owners. However, companies could be much more affected by the rising inflation caused by the war, which makes all kinds of damages more expensive and forces them to reserve more money for damages. They could also be affected by turmoil in the capital markets. Some insurers have already had to write down the government and corporate bonds in which they invest.

Joachim Wenning, head of reinsurance company Munich Re, initially gives the go-ahead. “On the insurance side, as far as damage is concerned, I wouldn’t agree that there are subsequent bookings that are gone,” he said at the insurance dinner. Süddeutsche Zeitung at Bensberg Castle in Bergisch Gladbach. Due to a corona infection, he was online. Insurers will have to make additional reserves, that is, increase their reserves, if the reserves are unlikely to be sufficient to pay long-term claims, for example, for accident victims, many years from now. However, if high inflation persists, property and casualty insurers could be forced to make additional reserves. First, they will be able to cushion the mounting damage through higher premium income.

Some applications, a little robotic advice is not enough

In order to master the current crisis of pandemics, wars and inflation that the world is currently going through, the industry really has to step on the accelerator when it comes to digitization. “We need to be resilient, and digitization is the tool to do that if we get it right,” said Mark Klein, Ergo’s chief digital officer.

What has happened so far (a few applications, a bit of robotics consulting, a bit of an online degree) is no longer enough to be able to adequately meet the needs of future customers. These have risen sharply again since the pandemic. People shop for groceries and sports equipment online, stream on-demand movies and series, and regularly video chat with family and friends. Everything is faster, more convenient, more digital: insurers must keep up.

“We insurers compete with technology companies like Google and Amazon, and that has to measure us,” said Ergo manager Klein. During the pandemic, people got used to smoothing out digital processes and also demanded the same from the insurance industry. Customer Question: If it’s so easy for others, why can’t my insurer do it?

Employees must be relieved of standard duties.

The industry cannot rest on its laurels. It needs a permanent transformation. “If we stop taking this transformation seriously, we will be left behind,” he said. He is convinced that the industry can master the challenges. “We have the digital skills, the first lockdown showed it.”

Ergo managed in a very short time to send 11,000 employees to the head office and still be productive. But there is still a lot of work: “We have 70 algorithms, but we need 7,000. We have 250 robots, but we need 1,000. We have 5,000 robocalls a day, but we need 10,000,” Klein said. In this way, the insurer creates freedom for its employees, who can be relieved of standard tasks.

It definitely can’t stay as it is, agrees Mirjam Bamberger, chief strategy officer at Axa. She gives examples of health insurance. “Right now I make an appointment with a doctor online, put it in my calendar, then sit with the doctor for an hour, and then go to the pharmacy with a paper prescription.” That costs the patient more than two hours, could go much faster, and private insurers should chip in.

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