How coronavirus has impacted life insurance sales

by Leo Almazora24 Mar 2020

As the effects of the global pandemic continue to ripple far and wide, the assumptions and risk factors that underlie many insurance policies are being upended. While the expression “all bets are off” applies and may be invoked in gambling circles, those in the insurance industry have no such luxury, and will have no choice but to determine how their products and services will be challenged.

But in the middle of all the turbulence, narrow windows of opportunity are opening for some, as reported by ThinkAdvisor.

Citing an emailed statement from Ethos Vice President of Insurance Phil Murphy, the publication said that Ethos has observed a spike in applications for life insurance. “This virus has people thinking about their mortality, and life insurance is increasingly top of mind now,” Murphy said in the email.

In line with that, Nicholas Mancuso, a life insurance specialist at PolicyGenius, suggested in a separate email that agents are becoming increasingly important to help address common consumer questions around coverage, particularly relating to the current pandemic.

“An experienced agent can help you navigate the application process as the situation evolves,” he said, noting that life insurance policies can protect families beyond just paying a death claim related to a pandemic.

As travel restrictions, shelter-in-place orders, and calls for social distancing continue to mount, organizations that are able to operate without face-to-face contact are seeing an outsized benefit. Companies that can issue simplified, no-medical products are in a good position to at least partially satisfy the massive increase in demand.

“The insurtech/online way of processing applications is better positioned to respond to this uptick in interest compared to traditional providers, since customers don’t need to leave their home to get coverage,” Ethos’s Murphy said.

Some may ask whether the impact of coronavirus on insurers will be too much. According to ThinkAdvisor, Murphy said economic issues and underwriting issues aside from COVID-19 are of greater concern right now for life insurers, while maintaining that the industry is prepared.

Aside from pandemic modelling and planning practices many companies adopt as they balance sheets, he cited regulations requiring insurers to hold significant reserves to manage claims volatility. Reinsurers taking on a portion of the risk for carriers’ claims, he added, further mitigates any potential impact.