The Pandemic Transformed Life Insurance Industry

The Pandemic Transformed Life Insurance Industry

The COVID-19 outbreak has pushed life insurance to the top of many people's priority lists, and several insurance companies have seen double-digit growth in the number of life insurance plans written last year.

More than half of American individuals had life insurance coverage before the epidemic, down from 63% a decade earlier. This comeback in life insurance activity has undoubtedly resulted in significant changes in the sector for 2021 and beyond.

Increased life insurance sales have always been fueled by fear. Many consumers were made acutely aware of the financial dangers of severe illness and death resulting from COVID-19. Thus, in both 2020 and 2021, people felt they needed life insurance.

32% of customers think the pandemic has made them more likely to acquire life insurance, while 42% say having COVID has made them more likely to do so. Several policyholders who felt they did not have enough coverage expressed an interest in life insurance due to the outbreak.

Consumers, especially younger adults, have purchased more insurance since the outbreak. The under-44 age group had a 13 percent increase in life insurance applications, compared to a nine percent increase for 45- to 59-year-olds and 0.4 percent for those aged 60 and older.

However, to continue to appeal to younger generations, insurers will need to pivot product offerings and procedures in the future. As a result, they embrace data analytics, big data, predicted models, artificial intelligence, and machine learning to optimize their underwriting processes and identify risk more efficiently.

As we adjust to life after COVID, it is evident that the world will not return to the "norms" of 2019. Life insurance companies must continually look for opportunities to create tools and models that attract new customers and satisfy existing ones as the marketplace changes.

The life insurance industry will see sales rise in the short term, but demographic changes, technology and digitalization are here to stay.