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In recent years they have become a true lifeline for bank fee income. And also to link customers and, therefore, make them more profitable. Insurance is once again taking center stage in the offices of the entities’ commercial network, faced with the challenge of adjusting the supply to an incipient demand that seeks solutions in the new environment left by the pandemic.
Beyond the impact of the crisis on income, insurers have already begun to notice certain changes in trends and behaviors that the coronavirus has imposed on society and that directly affect their business.
For example, mobility restrictions and confinements caused a drop in the turnover of the Auto branch, while Vida remained positive, thanks to the higher hiring of home insurance and, above all, health. Specifically, and according to data from the Unespa sector employers’ association, insurance that protects property grew 3.08%, to 7,753 million, while health insurance rose more than 5% to 9,383 million.
Change of trend
But there is more. “It is not just about a change in the trend of the different branches in light of the new circumstances. Customer habits have also changed a lot, especially among young people who are now considering taking out their first insurance. And that is where we will have to aim to regain market share “, they explain from a national financial institution that markets this type of product through alliances.
In his case, the bet on dispatches has focused on joining the ‘pay per use’ model that other smaller insurers have already implemented in the motor world. It is the case of Hello Auto, which allows its customers to take out ‘Netflix style’ insurance in which you only pay for what you drive (with a monthly fee per month plus an additional payment for each day you use your car).
From other entities they recognize that the sector clearly tends to this model. This is how he understood it Mapfre through Savia, its digital health services platform that during confinement triggered users by putting themselves at the service of the client for free. Its clients have free access to certain basic services, with the option of a payment of 10 euros per month with full access. The client can also choose to make a punctual payment at a time that needs a video consultation.
“It is clear that we are going to pay per use, as we have done with the development of Savia, a future solution to offer specific services within private healthcare for all those who they don’t want to commit to insurance with a closed period like the ‘rolling year’“, explained the president of Mapfre, Antonio Huertas, during the presentation of the company’s results.
Watch out for microinsurance
Several entities consulted indicate to Invertia that they are also studying to deepen and give a twist to the so-called microinsurance, traditionally thought as a business to promote financial inclusion, but now considered as a formula to attract younger customers. It’s about developing fully digital products that the client can ‘turn on and off’ to be covered in specific situations for a specified period of time.
This is the case, for example, of Banco Santander. Through your drive Wealth Management & Insurance, the entity has been working for some time on the ideal formula to adapt its offer to the changes that the pandemic has brought, from confinement to restrictions on mobility, also through teleworking or factors that affect travel.
“We are working hard on this, but we have to be able to fully resolve the insurance in a digital way to be able to launch,” explains Víctor Matarranz, who heads this unit of the bank that aims to grow at double digits this year. The manager refers to the need for a technological development that allows, easily, intuitively and without technological hassles, to ‘activate and deactivate’ the insurance for a 100% remote sale.
“We are evolving to incorporate this type of offer of microinsurance, that you can turn them on and off to hire for a specific event “, they explain from the entity.
For now, they already have the digital experience that other units such as Manage, your insurance broker in Chile, which allows you to buy insurance related to sports for days. For example, to cover a week-long ski trip. “We have to complete the offer there, but its success is closely associated with having it well formulated digitally because, if not, they are unfeasible,” they insist from the entity.
To follow this trend, the bank will bet on its alliances with other entities. “There are some products that, sometimes, the partner does not have it or has no interest in developing it and allows you to find a third party,” they indicate. However, and if they follow the path of recent years, the logical thing is that these new product developments are worked with their main partners. Specifically, with Zurich in Latin America, with Aegon Y Mapfre in Spain and Portugal, and with Aviva in the UK and Poland.
A couple of years ago, EVO already launched a similar product on the market by the hand of Santalucía. It was about EVO Protect Deportes, the first microinsurance of the Spanish bank hired by the hour and designed for people who practice some type of physical sports activity.
Specifically, it offered clients protection against accidents and bodily injuries that they may suffer when performing one of the 75 sports or free time activities covered by the insurance. It could be contracted via mobile, from less than 1 euro, and with an insured capital from 20,000 to 75,000 euros, adjustable by the user.
Immediacy, in these cases, is key to its development. For example, in the case of the EVO product, it could be contracted 30 minutes before starting a sporting activity and had a minimum duration of 3 hours and a maximum of 5 days.
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