2021: Predicting what’s next in an unpredictable world

2021: Predicting what’s next in an unpredictable world - The BDMA
Date: 10th July 2020
Author: BDMA

For both mice and men, unexpected events serve as a reminder that even the best laid plans can be subject to change and uncertainty.

In recent months, significant unexpected change has been collectively experienced at a global level with the dramatic and universal impact of COVID-19. For many, it has made 2020 a year to forget, and this has prompted us to take an early look at what the future may hold.

The following commentary may provide some insight and predictions in relation to the forces which may shape the damage management industry in 2021.

Weather events

Storms Ciara, Dennis and Jorge all contributed to the wettest February ever recorded in 2020. But how likely is it that we will see a similar situation in the months ahead? It is possible that answers can be found in data generated by the Met Office supercomputer, which models the likelihood of these events happening in the UK in the overall context of current global climate conditions. These simulations provide significant quantities and models of plausible information on possible weather outcomes. The conclusion is that more instances of extreme rainfall can be expected, with Professor Adam Scaife, the Met Office’s Head of Long Range Forecasting, highlighting that “there is a one-in-three chance of one or more UK regions experiencing record monthly rainfall each winter”. This means the dramatic levels of rainfall that triggered such severe flood damage earlier this year should be regarded less as an anomaly and more as being in line with scientific estimates.

Resilience measures

Boris Johnson has promised to “build back better” as the UK emerges from the worst effects of the pandemic, employing a phrase that was used by Flood Re in its 2019 plan for making the UK more resilient to the effects of flooding. The damage management industry will hope that the Prime Minister’s latest pledge will result in a continuation of the current investment in flood resilience projects across the UK while also encouraging and rewarding policyholders for taking preventative measures to avoid the worst impacts of extreme weather events.

Digital transformation

Enabling? Disruptive? Risky? Exciting? However, you view the impact of technology on the insurance industry and damage management supply chains, its effect will only be felt more deeply in the future. Digital transformation will be fundamental in delivering on the high expectations of customers and building loyalty in a market governed by consumer choice. Technology has the potential to bring greater efficiencies to the supply chain and will play an increasingly important role in understanding media conscious customer behaviour and making information available at every stage, from pre-claim communication to updates on the recovery and restoration process. Research involving CEOs by major Insurer, Deloitte revealed that 95% expect an increase in the use of advanced analytics over the next three years.

Industry collaboration

In 2019, the launch of the Insurance Fraud Intelligence Hub (IFiHUB) brought together 11 leading insurers in an effort to stem some of the estimated £2bn lost to fraudulent claims through real-time information sharing. Examples such as this demonstrate how collective innovation can be more effective in addressing the scale and fast-moving nature of many of the challenges facing the industry – challenges that may well be impossible to address in isolation.

People skills

Whatever benefits technology can bring, they are significantly amplified when complemented by the skills of qualified, trained and dedicated staff. The UK Customer Satisfaction Index highlights that helpfulness of staff is cited as one of three almost equal priorities among consumers alongside speed of response and ease of engagement. Insurance companies can be expected to place greater emphasis on their people as part of a wider focus on enhancing the customer experience. Damage management and restoration firms play a vital role within the supply chain, with consumers demonstrating the highest levels of trust and recommendation if organisations give them excellent service when experiences happened “at a difficult time”.