The Covid-19 pandemic created now problems for the world of life insurance. In an industry where most sales happen face-to-face, many life insurance professionals witnessed large drop in revenues in 2020.
For life insurers, many long-term assets they hold are exposed to market volatility. Life insurers faced asset liability management concerns when stocks, interest rates, and credit spread fluctuated during COVID-19, making it more difficult to manage their reserves.
While higher coronavirus fatality rates were predicted for the second quarter of 2020, they did not happen as planned. In reality, according to an S&P market intelligence study, the financial effects of policyholder fatalities was lower than most firms had anticipated.
COVID-19 was a big wakeup call
COVID-19 pushed us to acknowledge that we may not always be able to provide for those we love. While we all hope that day never comes, witnessing apparently healthy and relatively young people die to COVID-19 served as a stark reminder of the potential dangers
People are becoming more flexible, adjusting to a remote workplace with grace and productivity. We stay connected, although virtually, through virtual corporate meetings, coffee hours, performance assessments, and social gatherings.
Long after we have returned to our pre-pandemic routines and behaviors, one of the virus’s long-term impacts will be the acceptance of previously marginalized technologies and virtual activities. Many life insurance brokers who were first resistant to virtual technologies and social media have now embraced them and are effectively connecting and building long-term relationships with them.
Ultimately, in 2021, we all have a newfound regard and gratitude for the things we took for granted. Many, if not all, of us have a strong need to engage with other people. We’re spending more time connecting with friends and family, something we always knew was essential but didn’t make time for in our schedules.
There is also a renewed emphasis on getting our finances in order, establishing work-life balance, and working towards financial independence.
The epidemic demonstrated too many people that they were not financially prepared for an unexpected shock. It indicated a need for savings, financial planning, and life insurance.
For many young people, this is the worst catastrophe they’ve ever witnessed, and the lessons they’ve learned will not be forgotten anytime soon.
During the pandemic, customer expectations shifted as well. What began with online shopping via Amazon 25 years ago will continue to grow in 2021. We now expect to be able to locate what we need and desire, buy it quickly online, and have it dispatched the same day.
This reflects out the reality we witnessed in the insurance industry. Despite the hurdles of needing to master new sales tactics — including leveraging social media platforms like Facebook to hold live meetings and presentations with potential customers — Life insurance broker found prospects exceptionally enthusiastic to acquire life insurance.
Anything more than two-day delivery results in disappointment and anger. This has far-reaching consequences for every business, including insurance and financial services.
Producers must work quicker in order to provide policies on time. Those who cannot afford to lose the business they are attempting to obtain. The insurance sector faces a unique problem in that back-end processes remain essentially unaltered.
The pandemic is hastening the transition to electronic policy distribution, which will continue until paper delivery becomes obsolete. Life insurance brokerages who are unable to accelerate their underwriting process will soon be unable to compete with those that can.
In insurance industry, consumer demand for great service, delivered promptly, will push agents to determine if they want to remain there.
Answering messages and calls from clients and prospects via social media platforms at all hours of the day and night; or setting work-life limits and finding clients who value the same.
Opportunity exists everywhere, and if 2020 taught us anything, it is that we must be prepared to seize it.