COVID-19 Effects: Motor Insurance Practical Challenges

5 minutes, 36 seconds read

Published on Jun 16, 2020

The outbreak of COVID-19 shook the very foundation of many industries. It is probably the first time that a pandemic created a dent in the world economy. Statista estimates that COVID-19 will bring down the global real GDP growth by 0.5 percent in 2020 compared to the previous year.

Consumers have become conscious of their expenditure. Due to disruptions in supply chains, many small and medium businesses have suffered huge losses. A dip in international trade has created a ripple effect across all industries including travel, hospitality, insurance, and manufacturing.

The pandemic has different effects on the life and non-life segments of Insurance. While the rising concern for health has led to a spike in life and health insurance demands, the general insurance sector is suffering a setback due to restrained expenditure.

Motor insurance is no different from being severely hit by the pandemic. Amidst this crisis, people are not keen on purchasing cars, bikes, which is directly affecting the insurance sector as well. Re-negotiation on premiums is another big challenge for Insurers. Let’s delve deeper into the impact of Covid-19 on motor insurance and practical challenges for Insurers.

The Real Picture

Till a cure is available in the market, there will be travel restrictions to a certain extent. People will hesitate to commute daily and avoid long-distance travel. The significant drop in the usage of motor vehicles is impacting claims and sales differently.

Claims and Premium

In the initial lockdown period, many people were not able to drive their vehicles. The domino effect of this was a reduced number of motor insurance claims.

At first, it sounds profitable for Insurers. But, for policyholders, continued premiums on policies they can’t use seems an additional burden. So most customers are either asking for bailouts or reduced premiums or refunds on premiums.

Some major Motor insurance companies in the US and UK have already refunded 10-15% of annual premiums back to customers. In India, the finance ministry has extended the validity of the third-party insurance policies which were up for renewal during the lockdown.

Sales

Moody’s Investors Service, expects a 20% drop in global auto unit sales as compared to its earlier projection of 14%. In many countries, Motor Insurance is compulsory. However, if people won’t use vehicles, there’ll be a significant dip in the requirement for Motor Insurance policies.

In the wake of the current situation, IRDAI decided to withdraw its earlier policy of long-term third party vehicle insurance coverage from August 1, 2020. Earlier, the third party insurance was mandatory (three years for new cars and five-year policies for two-wheelers).

The IRDAI’s decision is a result of concerns over the implementation of a long-term insurance cover package which made buying new vehicles an expensive affair. This will reduce the price of vehicles, which, in turn, will boost the automobile and motor insurance sectors.

Prevailing Challenges for Motor Insurance Companies

Motor Claims Process

Vehicles can still suffer damage due to theft, natural calamities, non-usage, etc. Moreover, once people start traveling, accidents are prone to occur. It will be difficult for claims investigators to assess the damage through an in-person visit.

Some insurance companies are accepting claims and renewing premiums through online inspection and vehicle photograph assessment. This procedure, however, is still in a nascent stage. Despite high-resolution cameras, it is possible to overlook a dent due to deflection caused by sunlight.

Sales and Marketing

Even though automobile sales dropped in the short-term, it is expected to pick-up in the early quarter of 2021.

On one hand, marketing & selling policies at the original price will be difficult for motor insurers, and on the other hand, people will avoid public transport and prefer personal vehicles for commuting.

Insurers, thus, have a challenge for positioning their product that suits both — customer requirements and their profit margins amidst fierce competition with InsurTechs.

Policy Changes due to Volatile Consumer Behaviour

Since there were no clauses or policies for the pandemic in place earlier, some immediate mitigation measures had to be taken such as refunds on premiums to safeguard customers’ interests.

Going forward, till there is a conclusive solution to this crisis it will be difficult for Insurers to formulate policies that preserve both – their and customers’ interests.

Business Continuity

With lockdowns, major workforce resorted to working-from-home. In the beginning, some companies faced issues in making sure whether their employees had the means to work remotely.

Even though the lockdowns have been eased a bit and the workforce is getting used to collaborating online, the situation is here to stay. Smooth operations with a major part of the workforce working remotely is still a challenge, especially for call-centers, surveyors, and field investigators.

Lack of Historical Data

During the SARS and Ebola outbreaks, only some countries like Singapore, Thailand, China, the African continent were affected. To a certain extent, businesses were cognizant of the effects which COVID-19 would have on their businesses.

Therefore, insurers had come out with new policies and clauses on pandemics. However, the outbreak of a pandemic of this scale where the entire world felt the effects had not happened earlier. Lack of historical data for motor insurance is making it difficult to come up with mitigation strategies and business models for a sustainable and profitable business.

Mitigation Measures and The Way Forward

“Claims” is one of the most important aspects of motor insurance and will now witness automation more than ever. Coupling Machine Vision technology with panoramic/360° pictures can give insurers a holistic view of the extent of the damage.

Car rental services have an extensive guide to click pictures of the car rented before driving which makes the process very tedious. This can be simplified through apps having pre-shot pictures of the car before renting it out. AI can also help assess the accuracy of the images.

In the short run, finance ministries in many countries have taken steps to lessen the burden of the insurance premiums. But in the long run, insurers will have to come up with policies that are more viable for the insurance buyers. ‘Pay-as-you-use’ policies will see more demand because of their small ticket size.

Technologies such as IoT can help gather data through sensors that could help underwrite insurance premiums for vehicles. The data gathered can help understand consumer behavior and profile them for creating future strategies.

We’re an InsurTech100 firm, building AI-First Solutions for the new age Digital Insurer across the entire Insurance Lifecycle. For your specific requirements and Machine Vision for motor claims, please feel free to write to us at hello@mantralabsglobal.com.

The insurance industry thrives on relationships—but it can only scale through efficiency, precision, and timely distribution. While much of the digital transformation buzz has focused on customer-facing portals, the real transformation is happening in the field, where modern sales apps are quietly driving a smarter, faster, and more empowered agent network.

Let’s explore how mobile-first sales enablement platforms are reshaping insurance sales across prospecting, onboarding, servicing, renewals, and growth.

The Insurance Agent Needs More Than a CRM

Today’s insurance agent is not just a policy seller—they’re also a financial advisor, data gatherer, service representative, and the face of the brand. Yet many still rely on paper forms, disconnected tools, and manual processes.

That’s where intelligent sales apps come in—not just to digitize, but to optimize, personalize, and future-proof the entire agent journey.

Real-World Use Cases: What Smart Sales Apps Are Solving

Across the insurance value chain, sales agent apps have evolved into full-service platforms—streamlining operations, boosting conversions, and empowering agents in the field. These tools aren’t optional anymore, they’re critical to how modern insurers perform. Here’s how leading insurers are empowering their agents through technology:

1. Intelligent Prospecting & Lead Management

Sales apps now empower agents to:

Prioritize leads using filters like policy type, value, or geography
Schedule follow-ups with integrated agent calendars
Utilize locators to look for nearby branch offices or partner physicians
Register and service new leads directly from mobile devices

Agents spend significantly less time navigating through disjointed systems or chasing down information. With quick access to prioritized leads, appointment scheduling, and location tools—all in one app—they can focus more on meaningful customer interactions and closing sales, rather than administrative overhead.

2. Seamless Policy Servicing, Renewals & Claims

Sales apps centralize post-sale activities such as:

Tracking policy status, premium due date, and claims progress
Sending renewal reminders, greetings, and policy alerts in real-time
Accessing digital sales journeys and pre-filled forms.
Policy comparison, calculating premiums, and submitting documents digitally
Registering and monitoring customer complaints through the app itself

Customers receive a consistent and seamless experience across touchpoints—whether online, in-person, or via mobile. With digital forms, real-time policy updates, and instant access to servicing tools, agents can handle post-sale tasks like renewals and claims faster, without paperwork delays—leading to improved satisfaction and higher retention.

3. Remote Sales using Assisted Tools

Using smart tools, agents can:

Securely co-browse documents with customers through proposals
Share product visualizations in real time
Complete eKYC and onboarding remotely.

Agents can conduct secure, interactive consultations from anywhere—sharing proposals, visual aids, and completing eKYC remotely. This not only expands their reach to customers in digital-first or geographically dispersed markets, but also builds greater trust through real-time engagement, clear communication, and a personalized advisory experience—all without needing a physical presence.

4. Real-Time Training, Performance & Compliance Monitoring

Modern insurance apps provide:

On-demand access to training material
Commission dashboards and incentive monitoring
Performance reporting with actionable insights

Field agents gain access to real-time performance insights, training modules, and incentive tracking—directly within the app. This empowers them to upskill on the go, stay motivated through transparent goal-setting, and make informed decisions that align with overall business KPIs. The result is a more agile, knowledgeable, and performance-driven sales force.

5. End-to-End Sales Execution—Even Offline

Advanced insurance apps support:

Full application submission, from prospect to payment
Offline functionality in low-connectivity zones
Real-time needs analysis, quote generation, and e-signatures
Multi-login access with secure OTP-based authentication

Even in low-connectivity or remote Tier 2 and 3 markets, agents can operate at full capacity—thanks to offline capabilities, secure authentication, and end-to-end sales execution tools. This ensures uninterrupted productivity, faster policy issuance, and adherence to compliance standards, regardless of location or network availability.

6. AI-Powered Personalization for Health-Linked Products

Some forward-thinking insurers are combining AI with health platforms to:

Import real-time health data from fitness trackers or health apps
Offer hyper-personalized insurance suggestions based on lifestyle
Enable field agents to tailor recommendations with more context

By integrating real-time health data from fitness trackers and wellness apps, insurers can offer hyper-personalized, preventive insurance products tailored to individual lifestyles. This empowers agents to move beyond transactional selling—becoming trusted advisors who recommend coverage based on customers’ health habits, life stages, and future needs, ultimately deepening engagement and improving long-term retention.

The Mantra Labs Advantage: Turning Strategy into Scalable Execution

We help insurers go beyond surface-level digitization to build intelligent, mobile-first ecosystems that optimize agent efficiency and customer engagement—backed by real-world impact.

Seamless Sales Enablement for Travel Insurance

We partnered with a leading travel insurance provider to develop a high-performance agent workflow platform featuring:

Secure Logins: Instant credential-based access without sign-up friction
Real-Time Performance Dashboards: At-a-glance insights into daily/monthly targets, policy issuance, and collections
Frictionless Policy Issuance: Complete issuance post-payment and document verification
OCR Integration: Auto-filled customer details directly from passport scans, minimizing errors and speeding up onboarding

This mobile-first solution empowered agents to close policies faster with significantly reduced paperwork and data entry time—improving agent productivity by 2x and enabling sales at scale.

Engagement + Analytics Transformation for Health Insurance

For one of India’s leading health insurers, we helped implement a full-funnel engagement and analytics stack:

User Journey Intelligence: Replaced legacy systems to track granular app behavior—policy purchases, renewals, claims, discounts, and drop-offs. Enabled real-time behavioral segmentation and personalized push/email notifications.
Gamified Wellness with Fitness Tracking: Added gamified fitness engagement, with rewards based on step counts and interactive nutrition quizzes—driving repeat app visits and user loyalty.
Attribution Tracking: Trace the exact source of traffic—whether it’s a paid campaign, referral program, or organic source—adding a layer of precision to marketing ROI.
Analytics: Integrated analytics to identify user interest segments. This allowed for hyper-targeted email and in-app notifications that aligned perfectly with user intent, driving both relevance and response rates.

Whether you’re digitizing field sales, gamifying customer wellness, or fine-tuning your marketing engine, Mantra Labs brings the technology depth, insurance expertise, and user-first design to turn strategy into scalable execution.

If you’re ready to modernize your agent network – Get in touch with us to explore how we can build intelligent, mobile-first tools tailored to your distribution strategy. Just remember, the best sales apps aren’t just tools, they’re growth engines; and field sales success isn’t about more apps. It’s about the right workflows, in the right hands, at the right time.

Impact of COVID-19 on Motor Insurance & Practical Challenges for Insurers