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COVID-19: Time to unlearn the old and embrace future realities

We're at an inflection point. Futurists say the 2020s, starting with the COVID-19 pandemic, will shape the reality of the next 30 years. I agree, and I believe there are compelling signals that our industry is not only changing, but it is a microcosm of the change underway in society.

How we adapt to this change will be critical. Survival of the fittest is the old way of thinking; survival of the adaptive and resilient is the current and future reality.

Over the last two months we’ve surveyed clients about the pandemic’s effect on their business, and what's emerged is a picture of an industry that needs to be more compassionate, more “present” in the lives of its customers – through thick and thin – and of an industry that must rethink its products and services.

We will never return to the old version of “normal.”

Responses to our surveys showed a general awareness that at least some business plans will have to change. Most of you accepted that flexibility is important in these times, and that change is necessary. But what is most surprising is to what degree changes can or will be made and in what areas. Here are a few highlights:

We asked how COVID-19 is affecting products and services you provide:

  • Nearly six in 10 of you believe changes will have to be made to product development plans for 2020
  • 44% believe that the current environment will bring about a shift in priorities when it comes to products 14% believe that COVID-19 will ultimately change how resources are allocated

We asked if you are considering changes in how products are distributed, and a surprisingly large number do not anticipate changes:

  • Half of US respondents and 64% of Canadian respondents are not considering changes
  • 9% in both countries say they have already made changes

The economic downturn is taking a toll on family finances, which means some degree of sales drop-off is to be expected. Among those surveyed in the Group Life and Group Long-Term Disability market, we saw similar consensus across the US and Canada:

 One signal that is cause for alarm is confidence in actuarial assumptions. An overwhelming percentage of respondents reported that they are not considering changes to their Group Life or Group LTD assumptions: 77% in the US and 82% in Canada. Is it hubris? Is it confidence backed by data? It’s hard to tell, but one thing is certain:

While it's impossible to know how long the pandemic will last and its overall impact – it is clear that this public health crisis will affect morbidity and mortality like few events in our history, and we need to be clear-eyed about the future.

I mentioned compassion and being there for our customers. Our surveys reveal that the pandemic has prompted companies to shift significant portions of operations online – from the ways customers purchase products to customer communication. Digital transactions have seen an uptick, with 18% reporting an increase in customers accessing their accounts online and 14% signing up for automatic payment options and e-communications. A strong digital capability will become table stakes for insurers and this can be used as a key way for the industry to engage with consumers, whose awareness of the need for adequate cover has increased in recent months.

Marketing and advertising have taken on a different tone as well, with 70% of respondents reformulating their customer messaging with statements such as “we’re here for you” and “we’re in this together.” Respondents are taking extra measures to ensure support and customer satisfaction; half say they’re offering additional financial, physical and emotional well-being engagement tools to assist in the current environment.

One lesson the pandemic is teaching us is to never assume anything, especially when it comes to how much our customers know and don’t know.

So it was surprising to see that only 17% of Swiss Re Canadian clients and an even smaller 8% of US clients had informed their policyholders that death due to COVID-19 is covered. While a vast majority didn't inform (63% in Canada and 70% in the US) because they believed policyholders knew that life insurance covers all causes of death, this is a big opportunity to engage with consumers, and provide information and support in a time of need. Contrast that with our consumer pulse survey, in which 41% of consumers without life insurance and 25% of those with life insurance don’t necessarily believe their policy would pay out if they were to die from COVID-19.

Let’s face it: life insurance has never been top of mind with consumers. It’s something people don’t like to think about until the death of a loved one. The pandemic has forced us to confront our mortality and wonder how our families would be taken care of if we were no longer around. This is an important moment in time where we can demonstrate to the world why we exist, by delivering on our promises and using every opportunity to educate our customers and the public on the importance of life insurance.

The futurist Alvin Toffler once famously said, “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn.” With COVID-19, many of us have been pushed beyond our comfort zones – our resiliency and adaptability being tested – but these forced changes have introduced new openness and ideas for how we do things. In some markets we are actually seeing an increase in life insurance protection sales. This is a very positive development. However, let's not allow this to be a singular moment in time, in response to the pandemic. Let's make sure that it represents long term, sustainable growth for markets overall.

This year and the coming decade will challenge our industry like never before. We need to be “smarter together”—and it's together, learning from our collective experiences and challenges, and unlearning some of the old ways, that we can move forward. Through this shared knowledge we can create the products, solutions and services that can best serve the needs of your business and of your customers.