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17 Aug 2021

Pandemic reveals the need for protection as public shortfalls set to grow

In all countries, the Covid-19 pandemic has crystallized the importance of insurance, be it to protect health, income, or individuals’ overall living standards. Our previous research had shown that shortfalls in earnings, inadequate health care, and difficulties in making monthly commitments out of current income often drives the demand for protection.




Digital shifts in insurance

National markets for insurance, whether at the retail or company level, have widely varying degrees of intermediation, but most appear to be dominated by brokers, agents, bank distribution, and in some cases, employee benefits consultants. Nevertheless, the insurance industry in almost all countries expects to see a sharp rise in online sales and policy management.

This trend began before the pandemic, but enormous growth in e-commerce brought about by Covid-19-related lockdowns means that consumers of all ages have quickly become more accustomed to buying consumer goods online. Many insurance products are complex and require detailed purchasing guidance, so the design of some policies, as well as the consumer education methods associated with them, may need to be rethought to accommodate the shift to online sales.

Meeting rising demand

Looking ahead, various types of insurance are likely to be in demand as the pandemic has revealed the importance of protection in the wake of shortfalls in public services and policies. Particularly for workers at smaller businesses, it has revealed the limits of employer support in moments of crisis; while it has prompted employees at larger companies to reconsider what benefits they need most.

Most important is health insurance, which interviewees unanimously expected to become more popular through both group and individual plans – subject to affordability. This was true even in countries with higher-quality universal coverage, such as the UK and Australia.

Income protection and term life insurance will also see increased interest. In some cases, however, interest may not translate into demand. This is particularly the case with income protection insurance. Interviewees noted the importance of educating people about their protection needs, which should have even greater resonance now that people have first- or second-hand experience of health and financial difficulties as a result of the pandemic.

Communicating the benefits

When asked what types of messaging works when it comes to marketing insurance in general, a variety of answers were provided. For some, recent experience of Covid-19 became the single biggest “message” of our lifetime as it crystallized the vulnerability of individuals and their families. So, one possibility for messaging is to refer directly or obliquely to the pandemic experience by suggesting that taking precautions for the future is a smart choice.

Interviewees emphasised the positive aspects of taking precautions rather than the negative aspects of recent experience. They also noted that personal stories and vignettes from real people testifying to the benefits of insurance had far greater resonance than negative messaging such as threatening or lecturing them about the need to avoid bad outcomes, which may serve to discourage them from thinking about protection at all.

This article is reproduced from Zurich’s Shaping a brighter future of work report.

This article is provided by Zurich.

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