The pandemic has struck businesses across sectors to change the way they operate and the insurance industry is no exception. Importantly, the insurance sectors are one of the most affected sectors. The COVID-19 pandemic has resulted in a tremendous number of health claims. Already, the Indian insurance industry was passing through this challenging time.
The fact is Insurance companies are designed for this. Risk analysis and crisis planning are the central parts of their business. Recently a report published by PWC, the two productive months for the insurance industry – March for life insurance and April for non-life corporate renewals—have been hit by around30% and 15%, respectively.
If we analysis on individual insurance sectors visible the impact of COVID-19. Life insurance primarily protects the livelihoods and their future financial security for people. Sales of life insurance have been hit at a time when they are most remunerative – the 2020 end in March.
15% of respondents said they were likely to buy life insurance as a result of COVID-19. COVID-19 may have ramped up the pressure, but it has entirely accelerated a phenomenon already in progress, exposing where value is created.
Many insurance relationships have endured on a form of inaction, with family-run agencies and broker ties that go back decades. Human connections are still crucial—but sales activity has shifted toward finding real answers to real business problems.
As the pandemic limited some prospecting activity, many brokers have made their relationships stickier by providing even-handed advice around emerging risk management issues.
The Changing customer expectations affect every type of insurance model. We’re seeing traditional carrier-distribution demarcations breaking down. We’re also seeing managing general agents (MGAs) wanting to take on the risk themselves, morphing into full-stack insurers.
However, access to consumers is an area that poses a major challenge. Traditional channels may not work well and technology innovation would play a key role in solving the puzzle here.
Long-term guarantees will be looking attractive, but the insurers will face constraints in continuing to market these products as interest rates plummet. The overall uncertainty in the market volatility, and the falling interest rates have made an average consumer more cautious.
The COVID-19 crisis has specifically risen to both immediate and potential challenges for the insurance industry in near future. Insurance companies are taking the required measures to ensure a smooth transition of the industry into the post COVID world.The insurance industry still has a long road to achieving its goal which is decreased during the last time.