How COVID-19 will alter
the insurance and group benefits landscape
We’ve all had to adjust and react quickly in the wake of the COVID-19 pandemic and its many social and economic impacts. The news, numbers, and guidelines change daily and what we picture as “the new normal” never quite comes into focus. Still, though remotely, business goes on and people, families, and organizations still need insurance policies and financial safeguards against the unexpected.
So what does the life and health insurance marketplace look like in the post-COVID-19 world? No one can be one-hundred percent sure, but we can make three confident predictions:
· It will be very digital.
In its recent Q1 report, Shopify noted that despite its in-store sales being down 71%, its online sales saw a 94% rise, leading to a grand 46% increase in gross merchandizing volume (the value of everything sold on its platform).
With unpredictable lockdowns and consumers wary of in-person transactions, immediate digital transformation is no longer optional but imperative. What this highlights for insurance is the need to minimize or eliminate, where possible, in-person contact, for the safety and health of all parties involved. Self-service portals, interactive websites, e-commerce solutions and mobile apps will become increasingly important sales and customer service tools.
· Administration won’t look the same. Payroll deduction will be problematic.
Wet signatures and paperwork come to mind first, but with major disruptions to business and industry-wide shutdowns in certain sectors come inevitable interruptions to payroll and thus, payroll deduction. This could pose a major problem to all parties involved, especially to employees seeking to maintain their coverage during these times of great uncertainty. Solutions that allow for direct billing, conversion, and portability will become increasingly important and sought out
· Life insurance will be top of mind.
Perhaps due to words like “quarantine” and “infection” dominating the headlines, more and more families and individuals are prioritizing health and financial safeguards, and seeking out coverage. Forbes recently reported increases in online life insurance sales ranging for 30 to 50% especially among the under 45 demographic. Though far in the past, the 1919 Spanish Flu pandemic does provide historical precedent for such a jump in sales, with the National Association of Insurance Commissioners finding that life insurance sales increase by 78.9% following the outbreak.
What this all adds up to and where Parachute comes in?
When the Munich Re New Ventures team started working on Parachute Insurance four years ago, our focus was providing convenience through a digital insurance tool that allowed Canadians to activate portable voluntary life coverage in 8 minutes or less, without having to leave their home or undergo a medical exam.
Voluntary life insurance is a simple and affordable way for Canadians to protect their family and gain additional peace of mind during these uncertain times. However, the challenges posed by payroll volatility and limited digital solutions could limit their ability to access this resource.
As the world changes around us, our focus has shifted from convenience to necessity. The path ahead will be bumpy and the uncertainty will be with us for a good long while. But it’s important to remember the power of human innovation and its ability to create solutions. Through teamwork, a client first approach, and a commitment to digital transformation, Munich Re, Munich Re New Ventures and Project Parachute are ready to enter this brave new world with our partners and the broader community.