It’s Time for Life Insurers to Go on Offense After COVID-19
The pandemic showed consumers the importance of life insurance, creating an opportunity for insurers to make a play to close the coverage gap and bring financial protection to more people.
- Derek Kueker
- September 2022
It is said character is revealed in times of crisis. For the life insurance industry, the pandemic was such a crisis—and the industry demonstrated the true value and social good insurance brings to people in need. The challenge now is to turn the many achievements of the past two and half years into lasting benefits for the industry and the people it serves.
Rising to the Challenge
The pandemic was not a single event but a series of ever-changing challenges. While insurers focused on writing new business amid lockdown protocols and managing the claims impact of the virus, they were hit with a barrage of indirect business effects—financial market volatility, remote working, the Great Resignation, and the list goes on. Without missing a beat, companies created an improvised business-as-usual mode to continue to serve consumers.
An industry that relies on trends saw trends constantly evolving—where waves were hitting, who was being affected, what variants and sub-variants were emerging, how vaccine development and rollout were progressing. As things seemed to be winding down in the summer of 2021, the delta wave unleashed perhaps the worst phase of the pandemic for life insurers. But the industry continued to push forward.
Insurers found creative and innovative solutions to ensure that access and affordability to products remained constant. They accelerated changes to underwriting approaches to balance timeliness and consumer safety with risk management, condensing years of major advances into just months. Despite resource and workforce disruption, they met increased demand for protection products and paid billions of dollars in claims, fulfilling commitments to policyholders and providing much-needed financial support amid so much loss.
Embracing the Opportunity
As laudable as these accomplishments may be, now is not the time for the industry to rest on its laurels. It is time to go on offense. COVID-19 left consumers with a whole new understanding of and appreciation for the value of protection products, creating an opportunity for insurers to close the coverage gap and bring financial protection to more people.
Key adaptations made at the height of the pandemic should be evaluated as potential steps to progress and, if compatible with sound risk discipline, incorporated into new ways of doing business. Advances made in areas such as digital distribution and accelerated underwriting, for example, need to be carried forward and built on. Forward-thinking companies must find ways to sustain momentum in both consumer engagement and solution development.
Tomorrow's leading insurers will be those optimists now envisioning the limitless potential ahead and positioning their businesses accordingly. This will require both securing the financial strength to absorb future impacts and fostering the operational nimbleness to pivot quickly as new opportunities arise.
With companies expecting to move on to a new phase of COVID-19, the energy and urgency put into the pandemic should not be abandoned but redirected toward building the future. The life insurance safety net held strong for families around the world in the face of a global crisis, and the trust engendered as a result must now be leveraged to make coverage accessible to as many people as possible. If insurers embrace emerging opportunities with the same determination with which they faced the challenges of the pandemic, the industry's future will be bright indeed.
Best’s Review contributor Derek Kueker is vice president and senior actuary, Experience Studies Analytics and chief data officer, U.S. Mortality Markets at Reinsurance Group of America Inc. (RGA). He can be reached at CMSTeam@rgare.com.