October 26th, 2020
Writer: Kay Baldeosingh-Arjune
Our business is based on managing risk and we are confident that the insurance industry will be able to maintain its viability to ensure that policyholders’ interests are well protected and secure.
Despite the negative impact of COVID-19 on revenues and profits, the local insurance industry believes strong fundamentals will enable it to weather the current crisis and protect the interests of its policyholders, who will have increasingly greater access to digital services.
According to the Association of Trinidad and Tobago Insurance Companies (ATTIC), “The insurance industry, like most sectors in Trinidad and Tobago, has experienced declining revenues and profitability due to COVID-19. Nevertheless, the sector has a strong capital base which will enable the industry to survive the current negative economic impact of COVID-19.
Our business is based on managing risk and we are confident that the insurance industry will be able to maintain its viability to ensure that policyholders’ interests are well protected and secure.”
Perhaps the most significant impact of the pandemic on the operations of the industry was accelerating its online presence with online renewals, payments and quotes – a few of the features being offered by some insurers.
“More insurers are now seeing the importance of adding the digital element to their business model. Customers are demanding convenience and do not want to spend time visiting a physical location to transact business. The COVID-19 pandemic drove home how critical it is for our industry to be able to service our customers remotely,” ATTIC said.
ONLINE CLAIMS BANK
Digital transformation was a priority for the Association even before the crisis. In 2020, ATTIC launched its cloud-based Insurance Claims Bank Database, with the portal going live on 01 May. The Association said the online database, which can be accessed on its website by authorised persons, allows for the easy and convenient electronic sharing of claims information on all lines of business by its members. “The main impetus for this initiative is to aid in the detection and prevention of fraud. Benefits to the public will be lower cost due to a reduction in insurance fraud, and easier processing of their insurance needs as their claims history can be quickly and easily validated by any insurer,” ATTIC said.
REDUCING UNINSURED MOTOR VEHICLES ON THE ROAD
Another significant initiative in the pipeline is furthering the use of digital technology to issue and validate motor insurance by year-end. “Currently, motor insurance is only validated through the issued certificates which are provided in paper form. We want this extended to electronic form also,” ATTIC explained. Police and licensing officers will be able to access a cloud-based account to quickly and easily validate if a vehicle has insurance. “We are proposing to integrate this solution with the proposed radio-frequency identification (RFID) licence plates, so the authorities can quickly scan to validate insurance coverage. With this solution, the significant number of vehicles on our roads without valid insurance will be reduced,” ATTIC said.
ATTIC is also pursuing a “pioneering initiative,” to be implemented by year-end 2020 that will improve the process and reduce the settlement time of “contentious” claims. “We are developing a transparent, quick and easy solution of mediation and arbitration which claimants and insurers can use to settle matters” and which will be a complement to legal proceedings, ATTIC said. The Association further explained, “As citizens of Trinidad and Tobago, we are all aware of the challenges in using our legal system; it can take years to have a matter heard/settled and it is also very costly to all parties. This solution will greatly reduce cost and guarantee a settlement within a defined time frame.”
BURNING ISSUES PRE-COVID-19
ATTIC identified some of the burning issues confronting the industry as:
- Access to foreign exchange
- Increasing attempts to defraud insurers
- Required changes in legislation to facilitate the use of digital solutions
- Implementation of the new Insurance Act 2018
- Low-interest rates in an increasingly volatile investment environment.
“Our ‘New Normal’ is an increasing move to facilitate employees working remotely as well as being able to service customers remotely,” ATTIC said. It noted: “The need to “social distance” and limit the possibilities of being exposed to the COVID, at least until a cure is found, may push the more risk-averse members of our society to demand solutions facilitating this choice. This could also result in a significant reduction in annual miles driven, which would curtail demand for some of our services.”
IMPORTANT LESSON FOR INDUSTRY
COVID-19 has taught us an important lesson that remains relevant – we must have a well-developed Business Continuity Plan which also includes pandemic events, as they are more likely to reoccur than most may have predicted in the past.