COVID-19 Speeds Up The Modernizing Of The Life Insurance Industry

By Susan Ghalili

The COVID-19 pandemic has put a spotlight on the significant role life insurance plays in the cycle of life, as well as the importance of modernizing the sales model to withstand dramatic disruptions to the ways the industry typically operates.

The current situation has emphasized the fact that the future is unpredictable. This is one of the main drivers behind why people purchase life insurance – to hedge against some of that unpredictability. For distributors, the pandemic has not changed goals and objectives, and many distributors are still working to meet aggressive sales targets.

For consumers, the uncertainty surrounding the pandemic, related to both health and financial well-being, has prompted them to assess their own preparedness and has made life insurance more top-of-mind. As an industry, we must continue to look forward and find innovative ways to work together to meet consumer needs, especially under challenging circumstances.

Central to this transformation is modernizing the purchasing process for consumers. While we have seen an uptick in the number of individuals interested in purchasing life insurance throughout the pandemic, social distancing and safety measures have made traditional steps in the sales process impractical, if not impossible. These traditional steps include the in-person paramedical exams frequently required to complete many applications.

We know that in order to serve our customers well, the life insurance industry must accelerate transformation and streamline the purchasing experience to become more customer-centric and personalized.

Success will lie in harnessing technology at all points in the journey. This includes new ways to access personal health information and connecting the application process digitally, eliminating time and paperwork. By tapping alternative sources of information, specifically electronic health records, the underwriting time for some customers has been reduced from weeks to – in some instances – just minutes. Strategic collaborations also leverage HIPAA-compliant technology that puts the customer in control of the data they share with the insurer. In many cases, the information the insurer receives is sufficient for an underwriting review and does not require additional documentation or an attending physician statement.

The role of agents will be ever-critical as COVID-19 further advances digitization in the life insurance industry. As collaborations with tech partners become more commonplace, open communication between insurers and agents will be key to addressing the challenges presented by COVID-19 and shifts in consumer behavior. At its core, life insurance is deeply personal and while advances in technology are certainly beneficial for all of us, the personal connections, guidance and assurances that agents can bring are invaluable to many customers.

While the pandemic has added urgency to digitization efforts, this transformation has always been critical for the industry to keep pace with consumers. COVID-19 will continue to change our world and the life insurance industry in particular, as it has set the stage for continued innovation. With the support of like-minded distribution partners, we will start to see positive shifts for customers and insurers alike. Above all, it is important to stay focused on delivering critical services and solutions to customers and adapting underwriting guidelines accordingly and appropriately.

These times have challenged us all, but as an industry we have responded, and I have no doubt we will come out of this stronger and more fortified. By continuously modernizing processes, building trust with consumers on the frontline, and identifying innovative partnerships, the industry will be in a position to support our customers as we help them plan, prepare and protect – for whatever comes next.

Susan Ghalili is vice president and chief underwriter for John Hancock Insurance, where she has responsibility for managing all aspects of the underwriting operations and risk management to include managing impacts to mortality and morbidity results. Susan may be contacted at [email protected].