The Covid-19 pandemic has posed threats to economic activities globally. And insurance industry is no exception. Life insurance business is almost at stagnant position at a time when most of the major cities are under curfew imposed by local administration.
Most of the branch offices of life insurance companies are not operational. The news of death of agency members, employees, board of director from different corner is really not something that one would expect to hear.
Since, life insurance is wholly agency based business, life insurer are at a position to wait and watch in this adverse situation. The challenges faced by life insurer are the safety of their employees, safety of agency and uninterrupted service delivery to their clients.
The question is how these challenges can be addressed? Can any out of the box solution be available? Or will the regulator Beema Samiti come up with a quick solution for that?
Based on the notice issued by the local administration, Beema Samiti, the regulator of insurers, has issued circular regarding the service delivery of insurance companies.
The branch offices are not allowed to operate and all the service delivery are centralized to corporate office. Lack of awareness among clients, they are much worried about receiving the service from their respective insurer.
The gradual adoption of information technology in life insurance companies, renewal premium payment is not a big deal for clients. Clients with the access to mobile or online banking services and online payment wallet can easily make the premium payment.
In neighboring country India, during initial months of year 2020, life insurance industry went through decline of business revenue. But gradually with the shift of customer’s behavior and quick adaption to term product and digitalization the industry witnessed positive result. The use of digitalization, access to online platform and launch of flexible term plans are helping life insurance companies for business growth. Indian life insurance industry has witnessed a growth of 45 per cent in cumulative new business premium earning in April 2021 compared to cumulative new business premium of April 2020.
In Nepal also the business growth of life insurer is not disappointing as speculated during the first wave of Covid-19. But insurers speculate that business may not be as expected if the impact of pandemic continue for long. Due to the new regulation and directives issued by Beema Samiti, regarding the sales of single premium policy, policy loan, loan facilities and other benefits offered to life insurance agency, it seems that this year it would be a bit challenging for the life insurers to meet the expected business growth.
Here are some options that can be implemented for the safeguard of stakeholders of life insurance companies.
For the safety of employees:
-Making maximum arrangement for employees to continue their from
-Providing options to employees to choose themselves whether they
wish to work at office or work from home(wfh).
-Making sure that there’s end to end security while giving access to
the employees for wfh.
-Management must make enough arrangement for the social security of their employees.
-Arrangement of isolation and treatment for Covid-19 infected employees.
-Special compensation must be provided to the employees who suffered with Covid-19. Incentives to the employees who are delivering compulsory service from the work place.
-Regular meditation, motivational and interactions through online
must be done with the employees. The single sms of a CEO or HOD may be more effective than medication for an employee.
For the safety of Agency Members:
We are well aware that promoting life insurance with physical presence is high risky these days. So, alternative ways must be adopted to educated, attract and convince potential clients.
-Giving access to online resources to the agency members may be effective. Agency members must be able to submit life insurance proposal through paperless means i.e. online portal or mobile apps.
-Audio Visual materials which may describe the benefits of life insurance in a very simple way can be used to educate people. But there’s lack of effective audio visual materials that perfectly meets the clients level of perception.
-Actively playing the role of financial advisor. At the time of pandemic, the risk of life is high. So, based on the investment of the insured on life insurance, proper guidance can be provided by the agency member for the investment management like policy loan, payment of renewal premium through policy loan, reinvesting the policy loan to purchase a new plan etc.
-Yoga, meditation, counseling, online conferences are supposed to
keep people engaged in productive way while boosting their morale.
For client servicing:
-Access to service related information through all means of social media.
-Toll Free number for 24 hours support to client.
-Facility to online application submission for policy purchase.
-Online application submission for policy loan, partial, maturity or death claim.
-Access to the policy related information through online portal or apps.
-Virtual life insurance awareness campaign
-Availability of policy related information on website or social media platform.
-Rebate on penalty for delayed premium payment due to the pandemic.
-Offer discounts on medical treatment, pharmacy etc through B2B tie ups with the hospitals and pharmacy.
-Encourage people to choose term plan at very low premium in comparison to traditional endowment plan.
-Product innovation on term plan.
The failure of insurer to adopt and upgrade with the pace of the time would lag behind the market competition.
(The author is an Officer of Asian Life Insurance. The opinions are his personal and do not represent the views or opinions of his organization.)