Everything New is Old Again
“Everything Old is New Again” is a song that became very popular in the 1970s. With lyrics such as “Don’t throw the past away, you might need it some rainy day,” the underlying message is that historic events and trends, good and bad, are repeated or revived.
That certainly seems true based on the last 18 months. During COVID-19, as in previous disruptive events impacting the workforce, Workers’ Compensation insurers have faced significant challenges.
- COVID-19’s impact on the workforce has resulted in overall lower premiums for Workers’ Compensation insurance companies. National Council on Compensation Insurance (NCCI) reported that a drop in payroll contributed to a 10% decrease in overall national Workers’ Compensation premium for 2020 as compared to 2019.
- COVID-19’s health impact has increased workplace risk. NCCI noted that as of year-end 2020, NCCI state private carriers and state funds reported pandemic-related claims of $260 million in case-incurred losses and estimated potential result in Workers’ Compensation losses exceeding $500 million over the entire duration of the pandemic.
- COVID-19 has changed where work is performed. The rapid move to a remote workforce for large portions of the economy has changed many companies’ risk profiles.
But if you’ve been paying attention, Everything Old is New Again is not the central theme of this message. When looking to the future, it’s more important to know that Everything New is Old Again. The real message is that the new or accelerated changes brought about by COVID-19 aren’t going to fade away, only to be revived another rainy day. They are here to stay.
In preparing for a post COVID-19 future that’s inevitably more virtual, data and technology provide a pathway to enable Workers’ Compensation insurers to innovatively adjust and respond.
COVID-19 has accelerated customer preferences and behaviors, and has created a more remote workforce, making digital interactions in Workers’ Compensation insurance a key operational enabler.
- Most Workers’ Compensation insurance carriers have created digital experiences for individual operational components. Looking ahead, Workers’ Compensation insurance carriers will need to digitally transform consistently across the insurance value chain. For example:
- Digital presence and interactions to define and communicate product capabilities
- Digital portals and direct connection with Agents and Brokers to execute underwriting more quickly and accurately
- Direct connection with third-party service providers that enhance operational capabilities
- Digital service channels that are constant across physical and digital interactions and that inform and improve outcomes.
- Digital payments that have convenient payment options, reduce error, offer contactless payment options and increase customer loyalty
- Creating more digital interactions will also afford the operational areas of underwriting, claims, billing and audit more bandwidth to focus on deeper relationships, better outcomes and more effective operations.
The financial and economic challenges triggered by COVID-19 will continue to impact consumers and businesses, potentially leading to extended profitability impacts for Workers’ Compensation insurance carriers. Looking ahead, Workers’ Compensation carriers will need to continue to improve their operational efficiency. One of the key areas where technology can assist is through automation.
- Through the combination of data and analytics and artificial intelligence (AI) driving automation, Workers’ Compensation carriers can significantly streamline and enhance their operational processes such as:
- Product pricing with real-time, dynamic, analytical models
- Underwriting and claims with end-to-end processing augmented with enhanced data from IoT devices such as drones and sensors
- Select policy holder interactions with chatbots
- Workers’ Compensation carriers that take advantage of both pervasive digital interactions and operational automation create an operational “virtuous circle,” resulting in a continuous process of improvement across their operations.
- These capabilities will be fully delivered through cloud or a Software as a Service (SaaS) offering, enabling fast, responsive and scalable access from anywhere, anytime.
Most Workers’ Compensation carriers can’t meet these challenges alone. The good news is that there are software solution partners with extensive Workers’ Compensation industry experience, and a proven delivery capability that can help you realize all the benefits of investing in digital interactions and operational automation.
In my last blog, I provided a more detailed perspective on the qualities that make a great partner for Workers’ Compensation carriers.
To learn more about Sapiens Workers’ Compensation solutions, click here.