Analysts at Moody’s Investors Service believe it will be the technologically advanced life insurers that will likely come out of the COVID-19 pandemic on top in terms of sales, revenue, and profit growth.
Moody’s Vice President Laura Bazer says those with rigid product and business models could end up falling behind their peers.
“Although we do not expect rating changes due to technology alone in the near term, firms that are the least tech-savvy will likely have weaker credit profiles over time,” Bazer said.
Moody’s notes how 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 due to the pandemic.
Video conferencing in particular has been employed by companies as a way to touch base with employees and collaborate 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.
Additionally, some markets favour 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, Moody’s says this means lower sales in 2020, and possibly for longer – a credit negative for global life insurance revenues and profits.
