• Innovation, among Lloyd’s recommendations to create simpler insurance against the Covid-19

    Lloyd’s has published a report, 'Building simpler insurance products to better protect customers' ('Building simpler insurance products to better protect customers'), which outlines several ways in which the global insurance industry could eliminate complexity and provide greater clarity of coverage to its customers in response to coronavirus.

    https://futurelatam.inese.es/ – The coronavirus pandemic has set in motion an irreversible social change around the world, requiring new insurance solutions and greater protection of customers’ needs in the short, medium and long term. As countries and businesses begin to cautiously reopen and recover from immediate economic and social impacts, the insurance industry must seize this opportunity to improve the way it protects its customers.

    While the response and recovery efforts of the global insurance industry continue to expand through the payment of claims, charitable donations and product innovation, clear complications have arisen due to the uncertainty of pandemic insurance coverage and the ensuing legal disputes between insurers and their clients.

    Recommendations

    The report, prepared in collaboration with the Lloyd’s Global and UK Advisory Committees, has been published to support the efforts of the global insurance industry to better serve its customers through simpler products that promote a better understanding of hedges.

    It provides three important recommendations that the industry must implement to respond to the challenges that Covid-19 has presented:

    1. Leverage and build on the application of existing leading practice, including a linguistic review of customer documentation, for both simple and more complex products.
    2. Invest in continuous product design and delivery innovations, including data-based policies and digital contracts, as well as explore more radical options such as parametric or result-based insurance.
    3. Engage customers directly in product design to create products that are simpler and more relevant to their changing needs and post-pandemic risk profiles.

    Action measures

    Together with these recommendations, Lloyd’s is taking its own action measures which include examining how products are developed, designed and distributed, as well as bringing together business partners, risk managers and customers, to be able to proactively implement the changes across your global market in order to improve customer outcomes and more effectively meet your needs.

    The report also reviews the measures already taken by the insurance sector and regulators to address the issues of complexity of insurance products and clarity of coverage, including regulation, guidance and codes of conduct.

    Lloyd’s CEO John Neal said: As many companies around the world evolve to withstand the continuing impacts of the COVID-19 pandemic, including the radical change in their business models, the insurance industry urgently needs to reassess how it can better serve and support its customers. While the social and economic repercussions of the pandemic are of a scale never experienced, it has reinforced the imperative of the global industry to accelerate its efforts to create simpler and easier to understand insurance products for its customers’.

    Flora Hamilton, CBI’s Director of Financial Services, added: In a rapidly changing and changing market, this report highlights the importance of simplicity in a complex world. The IWC welcomes the focus on innovation and collaboration, which will be more necessary than ever as we recover better from the pandemic. We hope that this results-based approach will influence broader discussions on the resilience of the UK economy’.

    For the original article see: https://futurelatam.inese.es/

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