As Covid-19 sweeps across the world, the way we live, work and transact is changing at unprecedented rates.
Fear and information overload are the order of the day. We’re all doing our best with limited knowledge. And while the world will swing part way back to where it was, there’s no doubt that the pandemic is going to shape economies and industries in new and unforeseen ways forever.
An industry that’s changing particularly quickly is life insurance, where participants are seeing a major increase in demand from consumers.
There are clear parallels with what happened just over a century ago when the Spanish Flu pandemic hit the US.
In a research report titled “The Effect of the 1918 Influenza Pandemic on US Life Insurance Holdings,” Dr Joanna Short of Augustana College, Rock Island, Illinois, says: “There (was) a clear surge in life insurance sales in 1919 and 1920, particularly for ordinary insurance.
“Insurance executives… (reported that) 1919 was a banner year for selling life insurance and largely credit the epidemic for it… a survey of 32 life insurance companies operating in the state of Connecticut showed a 79% increase in life insurance written in the first six months of 1919, relative to the first six months of 1918.”
As in 1919, the current pandemic has caused people to re-evaluate their lives. Confronted by an onslaught of graphic images of overcrowded ICU wards, they suddenly see death as something real and life cover for themselves and their families as necessary.
Demand for life insurance has surged as a result.
However, I believe this pandemic is going to trigger a life insurance disruption that will go far beyond just an increase in demand. The Covid-19 disruption will drive rapid, profound digital transformation of the industry, and fundamental changes in the way life insurers, brokers and customers engage through the value chain.
Up until February, insurtech was “selling policies online”, now it’s “using technology to make your business and your value proposition better, faster and more cost effective”.
It’s taken a massive global pandemic to force the life industry out of its comfort zone and into a new digital normal.
Lockdowns, social distancing regulations and the fear of contracting the virus have forced people to engage remotely. And not just in the sales process.
