Swiss Re recently listed four COVID-19 challenges impacting life insurers as in-person sales, complicated protection products, paramedical services and going paperless.
The analysis is based on what leaders of life insurance companies in the US and Canada told Swiss Re about the most major problems they face amid the pandemic.
Firstly, in-person sales are challenging, with lockdown measures and social distancing. Carriers and brokers are said to be scrambling to enable their sales teams to sell via video conferencing and screen-sharing capabilities.
However, carriers observe that advisers no longer fear that they might be replaced by technology but recognise they can be more efficient with digital tools. Nevertheless, several questions remain as to whether sales will revert to in-person after the COVID crisis passes.
Moreover, selling complicated protection products has appeared as a challenge as a growing interest among distributors to sell simple products using new digital channels is observed. While the pandemic has made people think more about their mortality, middle-market consumers, in particular, are reported to be anxious and worried about their financial stability.
A LIMRA monthly survey revealed that although sales in April and May were weak, carriers were seeing an encouraging rebound in the sale of term and whole-life products by July.
Meanwhile, paramedical services have emerged as a challenge for carriers as it is challenging to visit the houses of policyholders to check their height, weight, or to take blood and urine samples
Many carriers had invested in accelerated underwriting programmes before COVID-19, but the vast majority have guidelines that allow only up to 60% of applications to be accelerated.
The remaining customers still require full underwriting due to the carrier's accelerated underwriting eligibility rules, the customer's health conditions or other risk factors that require further review by human underwriters.