LIMRA survey reveals altered consumer behaviour, as well as adjusted underwriting practices and grace periods
While the COVID-19 pandemic has pushed federal and state governments across North America to issue strict social distancing guidelines, a significant proportion of life insurers have not seen a significant change in overall applications.
That was one of LIMRA’s key findings following a survey on trends in individual life insurance application activity last month, which included 47 life insurers from the U.S. and 12 from Canada.
Among the participating companies, one third reported a decrease in face-to-face applications last month, and one quarter said that online applications increased.
Focusing on U.S. companies, nearly one quarter of those accepting online/mobile applications (24%) saw an increase, though half saw no change. On the Canadian front, most life insurers reported a slowdown in face-to-face applications; among 10 companies accepting online/mobile applications, five saw no change and three saw increased applicant activity.
Call centre and mail application activity was unchanged for most U.S. life insurance carriers in March; among the surveyed Canadian companies accepting such applications, none saw any significant change.
The survey also examined the different ways insurers have changed their application process for policies, considering the restrictive conditions necessitated by the pandemic. Among U.S. life insurers, more than a quarter have expanded their automated underwriting practices, one in five have postponed or waived paramedical requirements, and a small percentage are implementing face amount and premium limits for new coverage.
In Canada, many companies have changed or are planning changes to their underwriting practices. Most are waiving paramedical requirements for certain cases, while half are allowing exams to be postponed until they can be conducted.
The survey also found that Canadian insurers are extending their grace periods, though few have offered other forms of relief for customers that have sustained a financial hit from COVID-19.
“This may change as several companies say that they are still reviewing possible changes,” LIMRA said.
