COVID-26

/in /by

Most people don’t equate insurance with good news. But in 2026, there is some. And believe it or not, it’s attributable, at least in part to the post-COVID new normal. Here’s what we mean:

At the onset of pandemic, lockdowns led to fewer people driving, resulting in a dramatic drop in accidents and claims. Many auto insurers issued refunds or credits to policyholders (more than $14 billion, according to the American Property Casualty Insurance Association). Some states, like California and New Jersey, even mandated refunds for personal auto and other lines due to reduced driving.

Then, by late 2020 and into 2021, rates began rising as driving resumed, claim severity increased, and inflationary pressures emerged. Supply chain issues and changes in driving behavior contributed to increased costs, leading to significant regional rate hikes by 2023.

Where’s the Good News?

 It turns out, there’s good news on several fronts. Here are just a few of them:

  • Underwriting results and profitability are improving because, due to businesses and individuals resuming operations (and economic activity increasing after the shut-downs), premiums are growing post-COVID.
  • That economic activity and the corresponding increase in consumer demand allowed insurers to shift from aggressive rate hikes to more competitive pricing.
  • The pandemic accelerated digital transformation. Remote work and social distancing necessitated investments in AI, automation, and telematics for claims processing and underwriting.
  • The focus on personalized customer experiences was accelerated by COVID-19 because insurers adapted to digital-first interactions during lockdowns. Post-COVID, insurers continued investing in data-driven personalization and high-speed pricing models to meet heightened customer expectations for convenience and customization.
  • Perhaps most surprising, post-COVID economic pressures may have prompted regulators to re-examine pricing fairness and AI use more closely, given the importance of affordability to recovering consumers.

Is That It? Not Quite

The upside continues when insurers harness the power of fully integrated processing suites. Those suites can provide actuarial insights that refine premium calculations, assess risk with greater precision, and use metrics to better align pricing with real-world behavior. Just as important, they improve financial accuracy around incurred-but-not-reported (IBNR) claims by helping insurers set appropriate reserves. That ensures regulatory compliance, promotes pricing transparency, enhances understanding of claim exposure, and reinforces stakeholder trust.

If you happen to be in the market for such a system, we know some guys.