Insurers employing more sophisticated tools

Moody’s Investors Service says coronavirus has accelerated the use of increasingly sophisticated insurance online tools among global life insurers.

The recent expansions and acceleration in technology throughout the industry were a key theme and a positive element for insurers during an otherwise tragic global health crisis, and one that will differentiate winners and losers when the virus is finally behind us, it said.

“Technologically advanced life insurers that make doing business simple and easy, will likely be the winners in terms of sales, revenue, and profit growth over time,” said Laura Bazer, Moody’s vice president.

“The losers will be those with rigid product and business models that fall technologically behind their peers.”

Life insurers have been forced to pivot to virtual modes and processes as face-to-face sales of products and services initially came to a sudden halt as the pandemic spread around the world.

Video conferencing has become widely-used globally to touch base with employees and for collaboration with distributors. Activities have included sales meetings, virtual marketing, agent seminars and wholesaling.

Smartphone apps have been used to sell new policies and get health messages out in some regions of Asia.

However, new business prospecting and sales have been hindered by a lack of human involvement, especially for more complex products, such as estate planning, life insurance, and variable annuities, a Moody’s survey found.

In addition, some markets favor a more traditional face-to-face approach and other markets are less mature and therefore less technologically advanced.

Coupled with the global recession, high unemployment and ultra-low interest rates, this means lower sales in 2020, and possibly for longer — a credit negative for global life insurance revenues and profits, the rating agency added.