Bancassurance 2020: our ‘silver lining’
There is one English proverb that seems to sum up the message of this short article particularly well: ‘every cloud has a silver lining’.
This expression conveys optimism, the hope that a ray of sunlight will pierce through the clouds, and is used to show that every difficult situation has its positive side.
Well, this is how I like to look at the end of 2020: this year has certainly not been easy for our Bancassurance segment, but I believe it will bring many positive aspects into 2021 which I would like to share with you and expand upon during the work of this Bancassurance Forum.
The pandemic has forced us to make dramatic changes, such as rapidly revising our way of working, broadening the channels through which the Companies interact with distributors and end-customers, and reviewing products and distribution processes. In other words, a minor revolution has taken place in just a few months. According to one research company, the Companies have made a technological leap forward of 10 years within a couple of months, and, above all, they have managed this without any problems!
This is an aspect of innovation that has always fascinated me: i.e., the ability to find new solutions only when new problems or obstacles arise. Without these, innovation is, rather paradoxically, hard to get off the ground.
The ancient Romans were referring to this paradox when they said ‘in nomine libertatis, vincula aedificamus’. If you think about it, in order to free ourselves from the virus, we have placed ourselves under very stringent restrictions that have triggered significant changes, some of which have been accelerated by the pandemic.
For example, to tackle restrictions on movement and to ensure business continuity remotely, many Companies in the system have determinedly adopted smart working solutions for up to 100% of their staff, simply by using platforms that very probably could also have been adopted without the pandemic. Similarly, to address the need to interact remotely with customers, there has been an acceleration of digitalisation and document dematerialisation processes that very probably could have taken place without the pandemic.
Now that many months have gone by, however, we can say that the biggest lesson of the pandemic goes to the very heart of our existence as insurers: we also have to be prepared for the unexpected by strengthening our capacity to intercept and assume risk, in order to create an increasingly protected social system.
If, at the end of this long crisis, we have been able to create a more mature risk culture, we can look back on the tough period of the pandemic as an opportunity for growth which showed us the ray of sunshine of the proverb, beyond the clouds of our everyday lives.
But the pandemic has not only affected the Companies’ operations: it has also brought about important changes in the financial markets and consumer behaviour.
The further, rather sudden reduction in interest rates (particularly risk-free rates, which have hit new lows) has had a significant impact on the financial statements of the Life Companies and on solvency equilibriums. In this regard, the Life Companies have no choice but to revise their business models: here too, the first product offering innovations can already be seen, particularly in multi-channel products, which will change the future scenario definitively.
The fear and uncertainty that Covid has tragically generated among consumers is also changing their preferences in terms of policies. The last IPSOS survey, for example, shows a clear increase in Italian households’ need for security and growing focus on cover for particularly major risks, such as health and accident. The insurance Companies have always played a key role in meeting these needs and will have to continue interpreting this new demand from customers by formulating new responses in terms of products and services.
Therefore, also in our business, being ‘negationists’ and ignoring changes that are, in my view, irreversible, does not make sense. Instead, we should embrace them and welcome them as new opportunities for improvement and growth.
In recent days, there have been many discussions about the incredible vaccine mechanism, based on the injection of small doses of the virus to trigger the production of antibodies and make the organism stronger than before. I like to think that the same applies to our Bancassurance business: the difficulties of 2020 have allowed us to accelerate certain changes that have now made us much stronger. A bit like the fascinating Japanese technique of kintsugi, which takes broken pottery and makes it even more precious, enhancing the damage by turning its cracks into a strong point.
To conclude, I really hope that all of us, distanced but even more united, will leave this ‘cloudy’ 2020 behind us and only take into 2021 the ‘rays of sunshine’ that it has given us a glimpse of.
Thank you and good luck with your work!