Social distancing measures in response to the COVID-19 pandemic have changed the way that businesses in almost all industries operate, with finance and insurance being no exception. Working from home, a growing trend in recent years, became a necessity almost overnight. As restrictions gradually loosen and employees return to the office, the general success and feasibility of remote working will not be forgotten. As a result, the ‘work from home’ trend is likely to strengthen due to the current crisis.
A Sudden, Then Gradual Shift?
Health implications, as well as the punishing economics of the COVID-19 crisis, will tempt companies to decrease office space in favor of a hybrid approach.
“There will be a long-term adjustment in how we think about our location strategy,” says Barclays CEO Jes Staley. “The notion of putting 7,000 people in a building may be a thing of the past.”1
Mondelez CEO Dirk Van De Put agrees. “Maybe we don’t need all the offices that we currently have around the world. So there is a major effort going, taking place as it relates to the costs in the business.”1
The Proof is in the Virtual Pudding
The recent success of the home-centric model creates a compelling argument for its long-term adoption. Necessity, as usual, is the mother of invention.
“Now the technology for working from home has been proven, firms are doing a lot of thinking and some of the changes we have seen could be adopted in the longer term,” says Andrew Rogan, Director of Operational Resilience at UK Finance, a banking industry body.2
Norman Blackwell, chairman of Lloyds Banking Group has also been impressed.
“I don’t think any of us imagined quite how effective it would be working in this way, holding board meetings, holding discussions with multiple participants.”2
The Value of Preparation
The key to the success of the great remote work experience has been preparation. USG Insurance Services already had about 10% of their team working remotely with workflow systems, productivity metrics and technology in place.3 Nationwide, who have announced plans to move toward a permanent hybrid model, likewise credit their investment in tech as a major reason for their ability to adjust.
Canadian banks were also prepared, having spent more than $100 billion on technology since the 2008 financial crisis.4
“The pandemic has highlighted the emphasis on blocking and tackling – the ability to migrate a large proportion of the workforce to remote access, working with clients impacted by the crisis and ensuring risk levels are adhered to,” says Scotia Capital analyst Sumit Malhotra. “By and large, the systems of Canada’s banking industry are operating very well.”4
A Ready Public?
It’s not just staff that have needed to adjust to the industry’s ‘new normal’, but clients as well. The public’s willingness to adapt is likely to factor into the pace of change. Recent years have seen a greater and greater portion of our day to day business conducted digitally and holdouts are now getting on board out of necessity.
“Most of our clients are quite happy as long as we are accessible,” says Dale Hansen, CEO of Austbrokers Coast 2 Coast Insurance Brokers. “Their insurance IQ is increasing as this current situation is forcing them to be more resourceful.”5
Richard Beaven, COO of UK’s Brightside Group agrees. “More than ever, businesses will be digital, and as a result customers’ expectation of the quality of their digital journey will be even higher,” says Beaven. “Voice will no longer be the key channel, even for the older offline business.”6
Flexibility as Recruitment Tool
Beaven believes that a shift towards flexibility will combat perceptions that the insurance industry is rigid and inflexible.
“Now it has the opportunity to change forever and bring a whole lot of people back to our industry that have been lost. Those that have childcare arrangements, carer arrangements, health-related issues. I think, hopefully, this opens up opportunities for them.”5
Although current work from home practices are in response to an important need for isolation, it’s not without its challenges.
“As insurance moves to more remote working, there is a greater risk of fraud and hacking,” said Bruce Carnegie-Brown, chairman of the Lloyd’s of London insurance market. “We do now need to ensure we have resilience in remote working systems,” he said.2
Feelings of isolation and ‘Zoom fatigue’ are a legitimate concern and certain situations call for physical presence.
“I still think that brokers like to talk,” says Mercurien CEO Michael Graham. “I mean, I know some really great brokers – they’ll be working slightly more flexibly but they’ll still want to look out and see their clients’ premises. I think the good brokers will use their client visits as risk management conversation versus annual premium renewals.”5