Insurance market in Slovakia in the current era of digitalization
Digitalisation has not bypassed the insurance market, which has moved forward by leaps and bounds in recent years. This was mainly due to the pandemic, which forced individual insurers and the state to act and allow clients to process a number of requests without visiting a branch or without a large number of documents. Even though there is still a lot of work to be done by insurance companies in the Slovak market in this direction, we can already see the first significant changes that greatly facilitate several processes, including the selection of products or the conclusion of contracts.
In the article you will learn:
- Digitalization of the insurance market in recent years
- Insurers had to adapt to the new situation in a short time
- Insurance in Slovakia and news on the insurance market
- Digitalization in the insurance industry directly affects the labour market
- Why is digitalization so important for insurers?
- What changes could come in the future?
- Digitalization is far from over
Digitalization of the insurance market in recent years
The coronacrisis has affected the whole world and, in addition to the many problems it has caused, it has pushed many industries forward in terms of digitalisation. The insurance market in Slovakia falls into this category, which until 2020 operated largely unchanged. Everything was solved by visiting a branch, signing a lot of documents and going from one place to another.
This, however, was not the case during the period of restricted movement. Insurance market players had to look for other ways to stay in touch with their old and new, or potential, clients.
Gradually, they started with the digital transformation of their services, which in practice meant that the client could choose a new product online, conclude a new contract, cancel the old one, get professional advice via online chat or phone and much more.
Insurers had to adapt to the new situation in a short time
The spread of covid-19 has caused several downturns and shortfalls in the insurance market in 2020 and 2021. The new, uncertain situation culminated in clients not being as interested in insurance policies that did not cover the new virus at the time. They therefore did not take out contracts and some even cancelled them.
The largest shortfalls were recorded by insurers in guaranteed-return life insurance. This was followed by property and business insurance, which is not surprising as it is business people who have been hit hard by the various restrictions.
Further shortfalls were recorded by the largest insurance companies in Slovakia in assistance services, medical and travel expenses insurance and credit insurance.
The new situation took everyone by surprise, including insurance companies, which had to act quickly. Instead of the lengthy testing phases they usually go through after developing a new product, in this situation they had to go straight to launch. Clients could thus see the first changes and new possibilities for handling multiple services online as early as 2020.
Insurance in Slovakia and news on the insurance market
Each insurance product is defined by law and depends on the specific legal system and legislation of the country. This can include different types of insurance, from those required by law to specific products designed for particular situations or groups. In the last two years, the insurance industry in Slovakia has responded to the new needs of its clients. In addition to a variety of new products that include covid-19 risks, they have brought a number of innovations in the context of digitalisation. Which benefits we talk about ?
Contactless services
Contactless services were among the first services launched by insurers as part of the digitalisation. Thanks to them, clients can process their new contracts from the comfort of their homes, without visiting a branch and waiting for a long time or going from one place to another.
As part of contactless services, insurers also provide professional advice, the ability to enter into and terminate a contract, find out about insurance products and much more.
Although insurers did provide some contactless services in the past, they were not at such a high level as they are today. Moreover, there were not as many of them.
Online processing of life insurance
The ability to arrange an insurance product such as travel insurance or PZP from the comfort of your home is nothing new. Insurance companies have been providing signature-free contracts for non-life insurance for a long time. However, before the coronary crisis, if you wanted to take out life insurance, you could do so by simply visiting a branch and signing a few documents.
However, the 2020 and 2021 restrictions on movement have reduced the volume of new life insurance business for insurers, leading individual institutions to go unsigned on this type of product. This means you can take out life insurance without visiting a branch and signing lots of paperwork, saving you time and the environment.
Video inspections
In the past, it was common practice to require the presence of an expert, usually a technician, to assess damage to a house, home or car. He or she inspected the damage and, based on his or her expert opinion, the insurance company could begin the claims process.
However, such a procedure was not ideal during the coronary crisis. The presence of another person only increased the risk of virus transmission. Therefore, insurers started to deal with checkups in a different way, namely by video.
The injured client will then document the reported damage via their phone or other device that can capture video. He or she then sends it to the insurance company for assessment and processing of the claim.
Video tours are a much quicker and easier way to resolve an unpleasant situation that has happened to a client. Following the relaxation of the measures, some insurers have switched to a dual mode. This means that in some cases a technician has to come to the client for the inspection and in some cases the client just needs to send a video.
It all depends on the insurance company where the client has a contract, or on the insurance event. As a rule, minor damages can be photographed or filmed, while major damages require a professional.
New website
Insurance company websites are much more important than they may seem at first glance. A cluttered website can cause a client not to find what they are looking for or make the whole process unnecessarily complicated.
In addition to clarity, the website should also be responsive so that it can be easily opened on a mobile or tablet. Clients use these devices to process or check insurance policies.
Insurers have realised these facts in 2020. You may have noticed that many of them have changed and redesigned their websites from the ground up.
In addition to improving their websites, insurers have also improved their own mobile applications. They now provide much more functionality and work well on both iOS and Android.
Better online calculators
The new website also includes better online calculators. They are used to calculate both life and non-life insurance. Using them, the client can calculate the estimated amount without contacting the insurance company and then apply for an insurance product based on the calculation.
Online calculators make it easier for many insurers to arrange insurance because they give an approximate idea of the insurance not only to the client but also to the institution. The latter knows approximately what the client is interested in based on the information entered.
Better online communication
Communication with the insurance company has not been entirely easy in the past. Long minutes spent on the phone or waiting on hold before an email are now a thing of the past. Insurance companies strive to be available to clients 24/7. In addition, they strive to accommodate absolutely everyone, so in addition to the telephone connection, they also provide email, mobile applications, online chat or the possibility of communication via social networks.
Digitalization in the insurance industry directly affects the labour market
Digitalization in the insurance industry in Slovakia does not only bring changes in the processing of new insurance contracts. It also directly affects the situation on the labour market. Therefore, due to the advent of online services, the demand for IT workers from insurance companies has also started to rise. An example of this is the Actuary and Actuarial Manager in IT, whose role is to design and develop software solutions for insurance companies. Similar conveniences are gradually replacing administrative staff, who are no longer needed in such high numbers by insurance companies. Read also our article Why work in the insurance industry.
But the fact that the administration would completely disappear is unlikely. There will always be a certain proportion of clients who will be happy to visit a branch and sort out their requirements there. Even clients who do most of their business online will in some cases appreciate the human touch. However, the truth is that the number of jobs in administration will decrease over the years.
The IT field is diverse and more important now than ever before. So if it interests you, you should definitely get better at it. Experience can open doors to interesting jobs.
Why is digitalization so important for insurers?
New websites, contactless policy processing and much more – all of this is important for insurers not only in the face of the coronavirus pandemic, but also in the context of the growing online generation.
The generation of those who used to deal with everything directly in the branch with an administrative employee is aging and is being replaced by a generation of people growing up in the age of computers and the Internet. Insurers therefore need to focus on these people and respond to their needs.
Along with digitalisation, insurers are bringing new, more flexible products to the online generation to suit their needs. In addition, they are also trying to provide something extra, as people falling into this category often demand much more from insurers than clients in the past. For example, they expect corporate social responsibility, sustainability or a focus on ecology and environmental protection.
What changes could come in the future?
The insurance industry has undergone a great deal of change in recent years. It has made it easier for many clients to operate and has speeded up many unnecessarily lengthy processes. Despite this, there are a number of areas where it is stagnating and could still improve.
One of them is compulsory insurance. While it has been the practice for years to arrange it online, which is an advantage, many agree that a printed green card is a great waste. It will therefore not be surprising if both insurers and the state start to consider computerising it.
The Ministry of Finance planned to open a discussion on the legislative regulation of PZP later this year. We will see if this happens. However, motorists themselves are not pushing for the digitisation of the green card. This is most likely mainly due to the fact that the most challenging part of the whole PZP, i.e. its processing, has been online for several years. The actual carrying of the green card in paper format is therefore not such a big burden.
However, the Ministry of Investment, Regional Development and Informatisation of the Slovak Republic has been considering the total digitisation of documents for a long time. Such a step should contribute to speeding up the handling of a number of different tasks and solving issues with the public and private sector.
Digitalization is far from over
However, PZP is not the only one. Insurance companies in Slovakia still have a few weaknesses that could be improved to provide a much better service to their clients. However, if they move forward as they have done in the last two years, there is no need to worry about waiting too long. You can help speed up the process by developing software that will make it easier and faster for insurers. Browse our job offers and work in a constantly evolving field.
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