Pandemic Heightens Life Insurance Awareness, But Threatens Diversity

The COVID-19 pandemic led to plenty of change in the insurance industry -- not all of it bad.

Early numbers show a big push for life insurance from demographics that insurers have tried in vain to reach for years.

New research by LIMRA shows 6 in 10 Americans say they have a heightened awareness about the need for life insurance due to the pandemic. The result has been a 2% increase in new individual life insurance policy sales in the second quarter.

"We also know that in July, there was a 14% increase in the number of life insurance applications, if you looked at it on a year-over-year basis," said Mariana Gomez-Vock, vice president and associate general counsel of the American Council of Life Insurers. "So people are
obviously very aware of the importance of having it."

Gomez-Vock is leading a panel discussion today at the ACLI Annual Conference. The session -- titled "Unmasking COVID-19: Reinsurers Discuss What Comes Next in the Fight Against COVID-19 and a Global Recession" -- will cover the impacts of the pandemic and potential recovery.

Reinsurers serves as a backstop of sorts, helping insurance companies spread out their risk. As such, the reinsurance industry has struggled along with many economic sectors in 2020.

The top 20 global reinsurers reported about $12 billion in COVID-19 losses year-to-date. S&P Global Ratings reported last month. Although the reinsurance sector is "adept in dealing with multiple large catastrophic events," S&P noted, reinsurers are facing the pandemic at a time when the tide was turning on the soft pricing cycle.

Rising 'Burnout' Rates

So reinsurers, as much as anyone in the industry, have a strong bottom-line interest in seeing a vaccine developed, the pandemic brought under control and the economy turning robust again.

The ACLI session will touch on the lingering impact from the pandemic and the changes it forced upon the industry. Perhaps the biggest one is working remotely.

"Forty-two percent of the workforce is teleworking right now," Gomez-Vock said. "Productivity is high, according to surveys, but so are burnout rates, which are at an epic high."

A Sept. 30 story in the Wall Street Journal focused on the rising numbers of women who are checking out of their careers as the work-from-home mandate stretches into its seventh month in most places.

About 20% of working mothers surveyed this summer for the sixth annual Women in the Workplace study by McKinsey and LeanIn.org said they are considering dropping out of the workforce, at least temporarily, the WSJ reported. Eleven percent of fathers said they were considering dropping out.

An additional 15% of mothers report they may dial back their careers, either by cutting their hours or switching to a less-demanding role, the WSJ added.

Not surprisingly, the impact of pandemic-related stress is felt most by mothers of young children. Gomez-Vock questioned how the trend will impact insurers.

"What's the impact on gender diversity in companies, when companies have been trying to increase diversity across all levels?" she asked.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.

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