Client Safety and Comfort in the COVID Era

Life in America has utterly changed in 2020.  By now most of you are tired of hearing about the Coronavirus, for the topic of this ongoing pandemic has permeated and completely saturated all levels of media, including subjects on best agency practices along all lines of insurance.  But the reality is that the impact of COVID-19 is deeply affecting the business landscapes and strategies of most insurance markets.

Insurance claims stemming from infection rates of the virus itself as well as anticipation and trepidation of the spread of the disease has for months rocked domestic and international marketplaces.  We are seeing widespread hardening of the industry where fiduciary loss and overcompensating corporate adjustments have led to rising premium rates with fewer underwriting concessions among property, casualty, business and personal lines carriers.

The far-reaching global influence of the pandemic is already changing the practiced fundamentals and micro economics of local insurance scenes.  Even the specialty markets of Europe are forecasting billions in losses from bespoke products like event cancellation, trip insurance and non-appearance cover.  These remarkable Coronavirus claims combined with the usual anticipated losses associated with recurring natural disasters like Southeastern U.S. storms and Western U.S. wildfires are making 2020 an unfortunate year for the insurance record books.

But how can you mitigate the fiscal and socioeconomic panic of the world at a time like this in your own business practices?  How may you best serve your clientele while maintaining a prosperous book of business all while cultivating reciprocal and profitable relationships with cautious insurance and reinsurance companies?

Remember you serve the consumer, and in these uncertain times, it is paramount to protect your clients not only from financial disaster, but also in terms of physical safety and health.  We are in a health crisis, and the physical wellbeing of the populous is what is most important these days.  That is why the lifestyles we were used to eight months ago have been so drastically altered.  That is why many of us are working from home.  That is why we wear masks to the grocery store and physically distance from the neighbors we have known for years.  Life has changed…maybe just for the present, but it is definitely not the same as it was eight months ago.  Business practices are being quickly forced to evolve for the safety and comfort of our clients.

It became abundantly apparent in March of this year, at the point of the widespread “stay at home” orders coming down from state governments, that the pandemic had lessened comfort levels in consumer appetites regarding the prospects of purchasing life, health and disability insurance products.  Immediately, inquiries about guaranteed-issue policies and simplified underwriting garnered more credence than historically more important trends like price, product terms and policy wording definitions.

Clients were scared.  No one wanted a stranger in their home to perform paramedical examinations taking blood and urine samples.  Our homes have become familial bubbles – fortresses and safeguards against the virus.  In the past, insurance exams and labs were necessary inconveniences and part of the cost of attaining financial protection – a modest intrusion to allow risk assessment, providing underwriter familiarity for the decision making process of insurance companies.  The original intent of the home or workplace examination was to provide a very convenient service to the customer.  However, in the COVID era, the practice has become detrimental to normal insurance operations and to the psyche of the consumer.

Consumers are still scared of Coronavirus, and it is in your best interest as an insurance professional and advisor to keep your clients safe in this erratic environment.  Maximize client comfort by leveraging recent business practice concessions of insurers and wholesale underwriting firms.

For the past six months, life and health carriers of both the domestic and the specialty markets have scrambled to develop underwriting protocols that allow for greater consumer safety and peace of mind without hindering the underlying integrity of insurance carrier due diligence and risk analyzation.  Methodologies haven’t changed, but at times there is greater underwriter flexibility, and the grand journeys to those ultimate decisions do look surprisingly different.

Carriers are more frequently employing simplified-issue platforms on coverage with stricter benefit and term limitations.  Company management are also allowing underwriters to put greater stock into client phone interviews as well as primary care and specialist physician medical files.  Some life and disability companies are allowing prospective clients to submit previous physical exams and laboratory results for current underwriting purposes as long as the tests were performed within the previous six to twelve months.

Most markets are not wanting to see their business significantly falter, and they are willing to accommodate insecure prospects as much as their evolving, more-lenient business strategies will allow.  Specialty-market carriers like Lloyd’s of London are more frequently providing their disability clients nervous about face-to-face physical examinations with numerous product and underwriting alternatives.  For example, recent offerings include “accident only” disability cover without medical tests with an option to upgrade the cover to full “accident and sickness” at a later date once exams and labs are convenient.

Life carriers have certainly been a mixed bag.  Instances of coverage postponements and declinations for impaired risks and older clientele seem to have skyrocketed, but carriers are also allowing for more client accommodation of standard risks with simplified-issue, non-contact underwriting.  Consumers are able to acquire personal term life benefits from some traditional carriers without physicals, yet subject to limitations on term length and benefit amount. 

The specialty life markets have really championed zero-contact underwriting with the promotion of key person critical asset and contract protection insurances for business prospects needing timely issued high-limit death benefits.  Specialty underwriters have come to employ short-form applications of nothing more than a standard questionnaire and abbreviated health summary and no requirements of exams, labs or medical files.  Furthermore, impaired risk cases are still widely considered by specialty-market carriers.

Automation has also become quite important.  Insurance marketers have continued to move away from clumsy applications and supplemental questionnaires in favor of streamlined electronic application platforms and paperless policy delivery.  From a technological standpoint, insurance companies are making the acquirement of financial protection policies easier, safer and more comfortable for the consumer in the COVID era.

Although this pandemic has created disastrous results for many industries across this country, it has forced insurance carriers to rethink their procedures and underwriting methods, which, for the most part, should be pleasant news to you and your clients.  In many respects, insurance companies are attempting to be proactive and allow for flexibility never before seen in the industry.  It is up to you to leverage these circumstances, protecting the medical and financial wellbeing of your clientele.  A comfortable, healthy client is a happy client, and that is just good business.