Uptick in Covid-19, Downtick in Life and Annuity Industry

Life insurance sales are slowing as COVID-19 has led to a worldwide disruption of all industries. But most important for the life insurance industry, it has caused fewer house purchases, a key trigger for life insurance purchases. This is according to recent research by GlobalData. In many instances, the purchase of a life policy is triggered by a key life event. By far, the most common type of life cover is term assurance, which is often linked to a mortgage.

Beatriz Benito, Senior Insurance Analyst at GlobalData, comments: “The lockdown has interrupted the real estate business. This has slowed down property sales, a trend that is expected to continue in the near future. A fall in property transactions will further drive down the term assurance market, given that many customers buy life cover as a result of home moving. Added onto the difficulties of onboarding new customers, life insurers can expect a sluggish market that is likely to contract over the short term.”

Other factors have also contributed to the slowdown. It is customary for life insurers to require medical records from individuals as part of the application process for some life policies, particularly for those that are underwritten. Yet, lockdown measures to minimize the spread of the virus have made obtaining such reports challenging.

According to Deloitte, the life and annuity industry has been facing headwinds for years, which have been exacerbated by Covid-19. New research from their analysts say the industry faces an unprecedented need to transform in the following ways:

While hope was on the horizon, the uptick in hospitalizations across the U.S. has reversed some of the economic recovery. However, analyzing information such as the above points during this downtime will separate who comes out of this on top when the virus finally dissipates.

Emily Holbrook, Owner of Red Label Writing, LLC., is a veteran writer, editor, custom content strategist and wordsmith with 15 years experience in the content and publishing world.