Impact of COVID-19 on the Insurance Industry and How To Get Through it with Long-Term Planning

The COVID-19 pandemic has disrupted economies and communities around the world. From basic social customs and working arrangements to the global movement of goods and capital, the world is undergoing a drastic change as the virus spreads its wings over the world.

One of the industries that we are going to talk today about was already undergoing significant changes on a multiple front. We are going to talk about the insurance industry. Although, it has been researched that COVID-19 spread and lockdown will adversely impact the life insurers business in the short term, but with likely a change in consumer behaviour and rise in demand for pure protection products given the uncertainties and the long term impact may turn out to be positive for them. The industry may need to advertise their services and adopt some of the digital marketing services during and post COVID-19.

As one of the best advertising agencies in Gurgaon, we also learnt the impact of deadly virus on the insurance sector and will surely work on forefront to accelerate the sector’s business with our best digital marketing strategies. Now, let’s have a look at how the insurance sector has been impacted:

Impact of the COVID-19 on Insurance Sector
Insurers are responding to the widening COVID-19 outbreak on multiple fronts- as claims payers, employers, and capital managers. However, the most immediate concern for insurers is to protect the health and safety of employees and their distribution partners in the agent/broker community as they strive to maintain business communities. In the wake of COVID-19. Insurers are being challenged to review and update their crisis management plans and take steps to continue operations with minimum disruption to clients. Here are some challenges that insurance companies are facing:

• Strain on Investment Portfolios: Insurance companies mainly rely on their investment portfolios to generate returns. Due to the significant impact of coronavirus and lockdown, markets across the world have been in a turmoil and as a result insurer’s investment portfolios may have been impacted. Additionally, interest income revenue streams may quickly dry up as interest rates continue to drop.
• Delayed Payments: Regulators are urging insurance companies to accept late premium payments with no penalty, putting a strain on cash flow. Despite liquidity being impacted, insurance companies are still being expected to pay out claims.
• Decreased Premium Volume: Due to lockdown and following the norm of social distancing, there has been a decrease in demand for insurance. As lower payroll levels have led to lower payroll-based premiums, such as workers’ compensation and uptick in layoffs results in fewer people buying houses, cars, and other insurable purchases. A decrease in premium volume means a decrease in income for insurers.
• Coverage Disputes: Pandemics are generally excluded from insurance policy coverage and therefore policy premium has not included the necessary charges to provide such coverage. A number of government bodies are advising insurance companies to provide insurance coverage for business interruption and other losses for claims resulting from the COVID-19 pandemic.

Impact of COVID-19 on Life Insurance Policies and Health Insurance Policies

Life Insurance Policies
The impact of COVID-19 on life insurance is expected to emerge slowly. The effect of COVID-19 has resulted in lowering the interest rate levels. Life insurers will get to witness a spike in the number of life insurance policies as it is well-capitalized with established risk management processes including the identification, quantification and mitigation of risks.

The short-term impact of COVID-19 on insurance includes late premium collection and extension of grace periods. Life insurers are witnessing changes to underwriting, retention limits, reduced face amounts and limits on issue ages. In the medium term, the predictions have focused on putting a strain on life insurers’ earnings and capital due to market volatility and interest rates. A longer-impact on life insurers could include the changes in pricing, permanent changes in business operations such as underwriting, and long-term consequences of the financial fallout to investment strategies.

Health Insurance Policies
During the coronavirus pandemic, the demand for health insurance policies has seen a huge spurt last month. With the growing number of COVID-19 positive cases in India, it seems that people have become more aware of the importance of having health insurance. Apart from this, health insurers are doing their best to ensure seamless services and support to their existing policyholders.

Insurance companies have noticed 40% growth in the sale of their health insurance policies for the month of March. In terms of the number of health policies issued in March 2020, these were approximately around 45,000 as compared to approximately 33,000 policies issued in March 2019.

With the launch of coronavirus policy by several insurers, people are actively searching for these need-based health policies that cover coronavirus-pandemic as an uncertainty. According to the online policy distribution portal, Policybazaar.com, most customers are buying comprehensive health insurance policies. Also, the enquiries around COVID coverage in general health insurance policy has gone up by 10,000 per day.

Need of the Sharing User-Generated Content
We know this is not the right time to market your services, but it is, and insurers have got to do it with tact and responsibility. Determine what content is most relevant and impactful. For example, right now your clients need your expertise to clearly explain policy terms and conditions so they truly understand the intent of the insurance products they carry. Tap the targeted audience with the help of top online advertising agencies In India.

You can extend your expertise through social media and your insurance agency website’s blog. Be consistent about blogging once a week and posting on social media platforms directing clients and prospects to your blog for additional information. You can also share e-mailers or newsletters on a weekly or day-to-day basis. Hire the top social media agencies which will develop best social media optimisation strategies to engage with the customers.

Planning Ahead
You need to work with the best marketing team and determine future plans to help with your insurance agency’s growth and to make up for loss income due to policy cancellations and reductions in premiums. This may mean strengthening your digital platforms; for example, expand your website to include additional self-service features including online rating abilities where possible; display your thought leadership front with a fresh content marketing strategy and leverage email campaigns and social media on a consistent basis.

Devise the best business and marketing plan outlining opportunities available by reaching out to The Marcom Avenue, known as one of the top performance marketing agencies in Delhi NCR.