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P&C Insurers Shift Course as the Pandemic Continues

New SMA Blog by Mark Breading, Partner, Strategy Meets Action

When will the COVID-19 pandemic end? Will it end? P&C insurers, like all other business sectors, are faced with a time of unprecedented uncertainty. There are always multiple external factors to consider when developing strategies and adjusting ongoing plans. Now, layer into the traditional elements all the fallout from the pandemic, restrictions on economic activity, work-from-home, virtual schooling, social unrest, and political/legislative uncertainties. How are all of these developments affecting P&C insurer technology strategies and plans? SMA has been tracking changes to budgets and plans since the pandemic hit the US hard in early 2020 via Market Pulse Surveys and our ongoing work with insurers. This blog summarizes some of the big themes regarding overall tech plans and digital transformation.

In the spring and moving into summer, personal lines insurers were aggressively revising tech plans. Most navigated the transition to #WFM smoothly and experienced lower claims due to changing patterns. Even with large rebates to policyholders and auto premiums down slightly, the financial picture looked positive for personal lines companies. As a result, many were accelerating their overall tech spending and digital transformation projects. Commercial lines companies were faced with different circumstances during that timeframe. Pandemic-related claims were rising, and riots across the US generated a whole new set of claims. Many commercial lines companies were setting aside large reserves in anticipation of more difficult financial times ahead. As a result, tech budgets and plans were mixed for commercial lines companies. A quarter of the companies were slowing down or retrenching, while others reshaped their plans without changing budget levels. And a small portion were even accelerating plans.

Fast forward to September and a look at 4Q plans. In some ways, the plans for personal and commercial insurers have flipped. Personal lines companies have moderated their plans, while commercial lines are now speeding up. Digital transformation is still a big driver of activity for personal lines and a quarter of the respondents continue to accelerate their plans. However, there is a decline in the number of companies that are accelerating overall tech spending. Meanwhile, fewer commercial lines companies are pausing projects or cutting back budgets. As the industry settles in for the long haul, there seems to be a balancing out of plans for the remainder of the year.

An early glimpse into 2021 is fascinating. As insurers look to the future, there is a realization that digital transformation needs to be at the forefront of their strategies. Plans and budgets are just being developed now, but it appears as though there may be significant increases in overall tech spending and a rapid acceleration of digital transformation plans for both personal and commercial lines insurers. Most recognize that the world will not be reverting to the way it was pre-COVID-19. Many things have forever changed and shifted to digital/virtual modes. Self-service capabilities will continue to be a high focus area. And the movement toward higher levels of straight-through-processing for both underwriting and claims will be accelerated. At the same time, insurers are positioning to lower infrastructure costs by reducing or repurposing physical locations, cutting back on employee and vendor travel expenses, shifting more to e-delivery instead of printing and mailing documents, and more.

The industry is certain to experience more unexpected shocks along the way as industries and society adapt to events and movements borne out of the global COVID-19 crisis and significant shifts in the economy, demographics, politics, and other external factors. It will be a wild ride, but insurers are pushing the envelope on digital transformation to become more agile and responsive to changes during this volatile time.

For more information on the insights from the Market Pulse Survey, read SMA’s new research report, P&C Tech Plans for 4Q into 2021: SMA Market Pulse Insights.

About The Author

Mark Breading, a Partner at Strategy Meets Action, is known for his insights on the future of the insurance industry and innovative uses of technology. Mark consults with insurers and technology companies on forward thinking strategies for success in the digital age. His inventive methods and his ability to incorporate InsurTech and emerging tech into business strategies are unparalleled. Mark also leads SMA’s research program, has overseen the publication of over one hundred research reports, and directed custom research projects for insurer and tech clients. His thought leadership in the areas of InsurTech, emerging technologies, customer experience, and digital strategies has earned him rankings as a “Top Global Influencers in InsurTech” by InsurTech News and Onalytica and a place in the 10 finalists for the “Top Global IoT in Insurance Influencer Award.”

Before joining SMA in 2009, Mark spent 25 years with IBM, where he co-developed IBM’s Account Based Marketing program and led the global project office to implement ABM across all industry verticals worldwide. Mark has held both technical and business roles in sales, consulting, marketing, and business strategy and has advised insurers around the world for almost 30 years.

He is a frequent speaker at industry events; an InsurTech mentor with the Global Insurance Accelerator; and a frequent contributor of articles to Insurance Thought Leadership, Insurance Networking News, LOMA Resource, and many other industry publications.

About SMA

Exclusively serving the insurance industry, Strategy Meets Action (SMA) is an advisory services firm offering retainers, research, consulting, events, and innovation offerings to both insurance companies and solution providers. Learn more about SMA at

SOURCE: Strategy Meets Action (SMA)