COVID-19 in the Insurance Industry: Can IT/IS Management Incorporate Black-Swan Events?

In this paper we describe the effects of COVID-19 on the Dutch insurance industry. More specifically insurance companies need to re-assess their prediction models as well as their digital transformation efforts. The question how insurance companies can best leverage IT to manage the uncertainty associated with the COVID-19 pandemic will be the central topic of this paper. What are the main tasks for the IT/IS management layer to tackle the challenges posed by COVID-19, who is responsible for the execution of these tasks and who is held accountable are questions that will be addressed in this paper. Our research consisted of a literature review where we relied heavily on reports by industry experts such as Deloiette and EY to provide data as the event covered in this paper is recent and ongoing which limits the academic literature that is presently available. We consider several scenarios that describe how insurance companies can react to COVID-19. We offer recommendations that are intended to increase organizational resilience in the case of a black-swan event occurring. For example, insurance companies need to implement continuous assessment of their digital operations in order to remain sensitive to emerging threats and opportunities. It should be noted that the research scope of this paper was limited,  more research is necessary, especially research utilizing primary data. Nonetheless we hope this paper can help the insurance industry to develop a way forward by utilizing digital transformation which will help insurance companies thrive in a post COVID-19 world.