The pandemic brought unprecedented challenges to life insurance markets. With most sales conducted face-to-face, many independent financial professionals saw sales decline by about 30% in 2020. A KPMG report commented that of all segments, life insurers faced the most difficult challenges, because the long-term assets and liabilities they hold are particularly vulnerable to market volatility. Early movements in equities, interest rates and credit spreads created asset liability management risks for life insurers.
While elevated mortality rates due to the coronavirus were anticipated in the second quarter of 2020, through October of last year they had not materialized. In fact, as an S&P market intelligence report revealed, the financial impact of policyholder deaths was less than what had been previously expected by most companies. In fact, eight of the 15 largest publicly traded U.S. life insurers were expected to see year-over-year growth.
This bears out the reality we experienced at Brokers International last year. Despite the challenges of having to learning new sales methods — including using social media channels like Facebook to conduct live meetings and presentations with prospects and customers — financial professionals found prospects unusually motivated to purchase life insurance.
Being reminded of your mortality has a funny way of doing that.
The pandemic forced all of us to face the reality that we may not always be able to provide for the ones we love. While we all assume that day will come an eternity from now, seeing otherwise healthy and relatively young people succumb to COVID-19 was a pressing reminder that anyone of us could face the same fate.
At Brokers, we help 4,500 independent financial professionals build their businesses providing life insurance and other financial products to their customer bases. Last year that meant teaching them how to be accessible to customer inquiries in many different formats, including phone, email, video call, conference lines and even face-to-face when circumstances and comfort levels allowed for safe in-person meetings.
Internally, our employees flexed as well, adapting to a remote environment with poise and productivity. We stayed together, apart, with virtual company meetings, coffee hours, performance reviews and social “gatherings.”
Long after we return to our pre-pandemic routines and behaviors, one of the long-lasting effects of the virus will be the adoption of technology and virtual activities that had previously remained on the fringes of society. Many financial professionals who resisted virtual technologies and social media have now embraced it and are using it to successfully connect and build lasting relationships with customers.
Overall, we all have a new respect and appreciation for the things we took for granted in 2019. Many if not all of us have a deep longing for human interaction. We’re taking more time to connect with friends and family — something we always knew was important but for which we didn’t carve time out of our schedules to accommodate. There’s also a renewed focus on getting our financial houses in order, finding work-life balance and achieving financial independence.
The pandemic showed many people that they weren’t prepared financially for an unexpected hit. It revealed a need for savings, financial planning and life insurance. For many younger people, this is the worst crisis they’ve experienced, and its lessons won’t be lost on them anytime soon.
Consumer expectations changed during the pandemic, too. What began 25 years ago with Amazon accelerated in 2020. We now expect to be able to find what we need and want, purchase it effortlessly in seconds online, and have it delivered the same day. Anything past two–day shipping is met with disappointment and frustration. This has implications for every industry, including insurance and financial services.
Producers must work faster to deliver policies faster. Those who can’t lose the business they’re striving to secure. A unique challenge to the insurance industry is that back–end operations remain largely unchanged, even as customer expectations for faster service increase. The pandemic is accelerating the move to electronic policy delivery, a trend that will increase until paper delivery is all but extinct. Insurance companies that cannot speed up their underwriting process will eventually be unable to compete with those who can.
In our business, the demand from consumers for exceptional service, quickly, will force agents to decide whether they want to be “always-open,” fielding calls and messages through social media channels from customers and prospects at all hours of the day and night; or set work-life boundaries and find customers who value the same.
Opportunity is there for all, and if 2020 taught us anything, it’s that we need to be prepared to seize it.