The pandemic has changed the way most industries do business, and the insurance industry is no exception. As the United States slowly gets back to a new normal, we talked with Heath Ritenour, chairman and CEO of Insurance Office of America, about what consumers can expect from their insurance company and producers going forward in this post-pandemic environment. His answers might surprise you.
The Insurance Company in a Post-Pandemic Era: What to Expect
1. Better customer service. Did your auto insurance carrier send you a check last year? The rebate was due to the dramatic downturn in miles driven by the average policyholder, thereby making the risk of an accident much less for insurance companies. This is just one example of how insurance companies were proactive during the pandemic.
Consumers became fierce shoppers for insurance in 2020. Unfortunately, in many cases, the only thing that differentiated one insurance company from another was price. IOA Chairman and CEO Heath Ritenour sees better customer service becoming more and more important as a factor for consumers deciding what insurance company to choose.
2. Your agent may not be in the office. You may want to call your insurance agent to schedule an appointment rather than just dropping by his or her office. That's because many agents started working from home during the pandemic and most have opted to continue working that way or to move to a hybrid work model. "We've proven to be able to work quite effectively remotely," says Heath Ritenour. It's a trend that Ritenour sees continuing across the country as businesses emerge from the pandemic.
As working from home at least a portion of the time becomes the permanent norm for many insurance producers, expect more virtual meetings with your agent, email and text communication, and more flexible hours. Insurance documents that traditionally were signed in person are now being "signed" by secure document systems, like DocuSign.
It's not just producers who sell to individual consumers who are setting up virtual meetings with their customers. Traditional "road warriors" that sell and administer corporate insurance coverage and group insurance also are remaining virtual. Now that most people have become accustomed to this new dynamic, it's actually a win for both parties. The insurance brokerage saves on travel costs, and clients get better access to their agent, who isn't tied up at an airport or inside an airplane or vehicle.
3. New insurance technology. Until recently, many insurance producers were doing business much as they did 30 or 40 years ago, explains Ritenour. That's all starting to change rapidly. New insurance technology is making the process of buying and selling insurance products easier and quicker for all parties. According to Heath Ritenour, "Historically, the insurance industry has been rife with antiquated operational practices, cumbersome paperwork, and other factors that have slowed down the process. By implementing intuitive technology, and allowing consumers to obtain information in a manner most conducive to their own preference, we will be able to reach individuals in a modern, meaningful way."
An increasing number of insurance companies and agencies are embracing digital technology, such as offering apps that their customers can use to file claims and check the status of existing claims. According to a study by the consulting firm Bain & Company, digital adoption in the insurance sector grew by approximately 20% globally in 2020, marking an increase of "almost four times the compound annual growth rate of the prior four years."
4. New insurance products. Heath Ritenour also sees insurance companies rethinking their traditional insurance products and offering new products that are more tailor-made for their individual customers. One example is the use of telematics, which sets insurance premiums based on a policyholder's driving habits. Consumers seem open to this idea. A recent study by TransUnion found that 61% of drivers surveyed said they would be willing to allow their insurance carrier to collect real-time information about their vehicle usage if it meant they would receive a lower premium.
Another example is pay-per-mile auto insurance policies that charge customers a low, set monthly premium plus a daily per-mile premium. This is good for both customers who drive fewer miles as well as their insurance companies and works to better match risk and premium.
Business interruption insurance, while not a new product, took a step into the limelight in 2020, as many businesses were forced to close with little notice due to health advisories related to the pandemic. Most business interruption insurance policies exclude virus-related damages. However, in the wake of COVID-19 and shutdowns, insurance carriers will likely review any ambiguous policy language that addresses virus and contamination exclusions as well as defining what is considered property damage more clearly. Conversely, business owners are much more aware of the importance of exclusions and can be much more savvy about their coverage choices.
The Bottom Line
"The next few years will be exciting ones for the insurance industry," offers Heath Ritenour. "I think you'll see more new, innovative insurance products, more technology, and probably more consolidation, as those brokerages that can't make the switch to 21st-century technology leave the marketplace." Heath feels strongly that it's a situation that will be good for consumers and for insurance brokerages that are willing to adapt.
About Heath Ritenour
Heath Ritenour has spent his entire life surrounded by the insurance business. His parents, John and Valli Ritenour, founded Insurance Office of America (IOA) when Heath was still in elementary school. After resisting for a brief period, he joined the family business in 1996 and fully embraced it. He has worked his way up in the company, starting out as an agent selling business insurance. Heath Ritenour became CEO of the company in 2008 and chairman in 2018. Under Heath's leadership, IOA has grown to be the 11th largest privately held insurance brokerage in the United States.
Giving back to the community is important to Heath Ritenour, and he serves as the president of the IOA Foundation. A cancer survivor, Ritenour is passionate about helping other people in the community who are going through cancer treatment.