One of the realities of
the current COVID-19 pandemic is the fact that it has made people realise the
importance of having adequate life, disability, and funeral cover in place. And
with
clients considered the most
disruptive force in the insurance industry, insurers would do well to ensure
they provide innovative retail products that meet the expectations of
increasingly digital-savvy customers, says Annalie Terblanche, head of product
at SilverBridge.

COVID-19 has been referred to as the agent for
change in the way the life insurance sector operates, challenging the status
quo for insurers and becoming more responsive to client needs. When the country
commenced its lockdown at the end of March, the immediate concern for insurers centred
on protecting the health and safety of employees and distribution partners in
the agent and broker community as they focused on maintaining business
continuity.

Shifting engagement

“Part of this entailed
putting in place interventions designed to deliver a comprehensive contactless
environment between the insurer, its partners, and customers. This was not only
limited to the corporate side, but also focused on modernising traditional
practices when it came to retail customers. For those brokers reliant on
face-to-face sales, the lockdown signified a period where growth opportunities
would be impacted as meeting a client over coffee to discuss their insurance
portfolio could not take place. Because of this, attention shifted to an
increase in demand for digital distribution. According to a recent
news article, insurers who
have given trading updates for April and May reported significant sales
declines. And while there has been a growing increase in consumer awareness
regarding the importance of insurance during these challenging times, insurers
must be able to provide a digital experience to mitigate the risk of a lack of
face-to-face engagements,” says Terblanche.

Furthermore, the demand
for online life insurance products is also expected to increase. Its ease of
access and quick turnaround times from application and policy management
perspectives make it an ideal solution for people concerned that they might not
have adequate (or any at all) cover during these uncertain times. By better
leveraging their digital distribution capabilities, insurers will be
well-positioned to effectively do so. This crisis will likely prove to be a
catalyst for not only product simplification, but digitally-assisted ways of
engaging with customers and servicing their needs.

Renewed importance

“In India for example,
even though new business premiums
declined by 32% in March due to
COVID-19, life insurance sales using online channels increased by 20% in the
same month. This trend is one that is likely to be reflected around the globe.
Central to insurers being able to respond to these changing customer
expectations for the availability of more digital channels, it has become
critical to modernise insurance systems and digitalise processes. Without
either of these in place, an insurer will be limited to almost exclusively
traditional sales opportunities significantly impacting on its growth
potential.

The road ahead for life
insurers might be difficult to predict,
research suggests that there may
be a number of long-term positive benefits for the sector. This will not only
give impetus for the increased demand in life insurance but will also see
attention turn to retirement policies. This can at least partly be attributed
to the ‘taste’ of unplanned retirement the lockdown has given some people. The
significant impact on income, limited mobility and access to goods, and
isolation might just be the spur required to rethink how an individual’s
retirement annuity is structured or managed.

“Ultimately, those
insurers who facilitate a digital customer journey using digitally enabled
go-to-market models, will be the ones that are best positioned for growth in
the current and post-lockdown world. Through these digitalisation and
modernisation efforts, the insurer can help grow trust between itself, its
partners, and customers in more user-friendly ways with the ability to provide
best-in-class solutions delivering value through online means,” she concludes.

Issued by Rubicomm on behalf of SilverBridge