Eliza Davies

Coronavirus outbreak has already imprinted itself upon the nation’s psyche, just like World War II. The pandemic has shaken healthcare systems, hit economies, and affected industries; all of this has led to increment in insurance claims (life, health, business, employment, etc.)

In the wake of COVID-19, insurers are contractually obligated to make large payments—with payments on event cancellations, trade warranty, and workers' compensation claims being the leading cause.

 In countries such as South Korea, New Zealand and Germany that have managed COVID-19 with success this future is easier to imagine. It seems less likely in large and challenging countries like the United States, Brazil, Russia and India.

 The government of the United States is the only agency with funds to help close the pandemic coverage gap. The government also has a role to play in resolving those broad threats that threaten our domestic prosperity. It is evident that pandemics will be among these threats, and there is a discussion going on about the best model.

A proactive strategy is needed to ensure that insurers, government, and policyholders collaborate to build the best plan for any pandemic in the future.

 In the United States, John Doyle, CEO of the insurance broker Marsh, wrote to the Trump administration's economic team proposing the pandemic insurance program for risk-sharing among the public and private sectors.

The Reinsurance Plan, similar to the Terrorism Risk Insurance Act, has been proposed by the House Financial Services Committee to cover pandemics by restricting insurance firms' gross risks."

 During a pandemic, insurance companies provide the confidence necessary for businesses to open their doors to take on business risks, and pay trillions of dollars of claims from coronavirus through various policies. Insurance will contribute to reducing large risks and building resilience to avoid potential economic harm to the magnitude of the recent pandemic.

One of the system's main advantages is that the government does not charge insurers a fee for its back-up, but can reclaim specific government spending from all commercial policyholders later — in the form of tax.

The impact of COVID-19 on the world is unfolding new challenges for insurers each day. Currently, it is not easy to examine the entire impact; as a result, the emerging trends in the insurance industry can either become standard or vanish. The coronavirus pandemic might disappear soon, but its effects on the industry and world economy are likely to persist in the long run.

Insurers are putting their best in completing insurance claims processing, managing workforce, handling finances, etc.; each aspect of the business brings a new set of challenges. Here, what insurers can do is stay updated with industry and technological trends while keeping keen eyes on the future, predicting, and analyzing the possible change in customer demand and market.

Here are some technologies and trends insurers can learn more about and adopt the same for the betterment of their insurance agency/company.

01) InsureTech& Flexible Term Life Coverage

Credit: Alice Stevens -Insurance Expert or Senior Editor Specializing at Best company

Here are my thoughts on technology and insurance trends in life insurance. A rising trend in life insurance is using insurtech to make the quote, application, and approval processes faster and easier for shoppers. This type of insurtech is very common, especially for term life insurance. A few examples of companies are Bestow and Ethos.

Other companies that use these methods operate like agencies. Agencies don’t underwrite the policy. They sell policies from several insurers. Two examples include Quotacy and Policygenius.

One rising trend is flexible term life coverage. These policies generally start at a high level of coverage that can decrease over time as your life insurance needs lower. For example, the more of your mortgage you pay off, the less life insurance coverage you need. As your coverage amount decreases, so do your premiums. Lower premiums free up more cash for your monthly budget.

I’m aware of two companies that offer these flexible policies. Everyday Life offers policies that automatically decrease coverage levels over time. Ladder offers policies that you manually decrease as your needs change. Ladder also allows policyholders to apply to increase their life insurance coverage.

Many of these newer life insurance companies are backed by companies with a high financial strength rating from A.M. Best. This backing is important because life insurance payouts are large, lump sums of cash. You don’t want your insurer to file bankruptcy or be unable to meet its claims obligations for any reason. Since these companies issue policies underwritten by trusted insurers or are backed by them, you can be confident when you’re buying from these companies.

From the day COVID-19 pandemic was declared a global health emergency, the entire world has been dealing with countless difficulties, out of which many are still unresolved. It has significantly disrupted economies and public healthcare systems worldwide.

The crisis can be seen hitting the insurance sector more because millions of insured people are seeking testing and treatment coverage, while due to lockdown in many locations and social distancing practice, people avoid coming out and buying insurable products such as vehicles, appliances, etc. leading to less demand, less revenue.

Meanwhile, for many reasons, the insurance industry (similar to other sectors) is going through staff shortage, making it challenging to process claims on time. For this, many insurers are choosing to get external help/support or outsourcing insurance claims processing.

No doubt, there are several such challenges that the insurance industry is currently facing, let’s read what industry experts say about the effects of COVID-19 on the insurance industry operationally and economically.

The Impact of COVID-19 on Operations & Financial Performance of Insurance Businesses

5. Go virtual

David Duford, Owner of Duford Insurance Group

The unfortunate “good news” with the pandemic is interest in insurance products has measurably increased. Most insurance is purchased in accordance with life events like marriage, buying a new home, new vehicle, etcetera.

COVID-19 falls into this category. People who never thought about purchasing life insurance or second-guessed whether or not they were adequately insured are now giving serious consideration towards purchasing.

This is why demand has increased. However, due to stay-in-home orders and fear of face-to-face meetings, agents have had to alter their sales strategy to virtual sales using the telephone and conference call software.

While most agents are accustomed to selling face-to-face with their insurance prospects, the pandemic has encouraged prospects, otherwise used to meeting agents face-to-face, to accept virtual meetings instead.

How COVID-19 affects supply of providers?

COVID-19 will cause long-term economic peril for many industries nationally for the foreseeable future. Otherwise, talented people will lose their jobs due to furloughs and layoffs.

This provides an opportunity for insurance agencies to recruit and enlarge their agencies with new hires that can leverage the increased demand for insurance. Economic downturns are usually good opportunities for many insurance agencies to build their sales force, introducing skilled salespeople to their industry.

Personally, I came into the insurance sales business in 2011 during the Great Recession out of pure desperation. No one was hiring, and my former business was failing fast.

My thoughts are many people will experience a similar scenario as I had faced and find themselves entering the insurance sales business due to little job options.

igitalization has taken all the industries by storm and is the latest trend because of the numerous benefits it provides. It has been facilitated by many technologies in the market like mobile technology, CRMs, cloud computing, artificial intelligence, and much more. The insurance industry is also not far behind in adopting the latest technologies & trends.

Let’s check the Opinions of industry experts on how digitalization is affecting the insurance industry

1) Eliminated Manual Processes

“Digitalization has completely transformed my insurance agency. When I began in 1996, I drove hundreds of miles a week to meet with clients to discuss their Medicare coverage options. We also did every application by hand.

Those applications were mailed or faxed to the home office of the insurance company and the data was entered into their system manually. There were many opportunities for mistakes by the agent or in the data entry at the company.

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