It has certainly been a challenging and unexpected year, with COVID-19 significantly impacting customers both from a financial and health perspective.
Whilst the acute implications of the pandemic have seen responses from both government and industry, many key challenges are still on the horizon and these will require a concerted effort from all of us to resolve.
When you couple this with the transformation currently underway across the group insurance market, these challenges present a material opportunity for those that take a customer first approach.
We need to continue to respond to the economic challenges created by COVID-19
The socio-economic impacts of COVID-19 have been significant. However, the most challenging period for our industry lies ahead. We must continue to maintain a disciplined focus on supporting our customers as the benefits of government policy taper off.
A recent study from the University of Sydney outlined the impact COVID-19 has had on the global economy, with overall global consumption down the equivalent of US$3.8 trillion ($5.13 trillion), resulting in full-time equivalent job losses of 147 million.
Looking closer home, Australia suffered a sharp, albeit disproportionate, fall in employment between February and May. We know that younger people have been heavily impacted, with around 500,000 people under 35 losing their jobs in the early stages of the pandemic.
In August around 300,000 of these people were still out of work. This is largely due to the uneven impact COVID-19 has had on the economy, with the hospitality industry most severely impacted with almost 300,000 job losses between February and May.
We know these economic impacts will be long lasting. We know that our existing products are not intended to respond to macro-level events, like a large number of customers being stood down or become unemployed, creating unintended customer outcomes.
In the face of such challenges, it’s more important than ever to ensure sustainable and customer-oriented solutions are found that align to the needs and maintain the integrity of group insurance pools. Temporary measures need to be replaced with permanent ones, such as removing or changing cover in some cases to ensure customers hold the right products that align to their circumstances.
We need to continue to invest in helping customers improve their overall health
The continued rise in chronic disease in Australia makes our community more vulnerable to acute health emergencies such as COVID-19. The World Health Organisation data demonstrates that COVID-19 is not a one-off event, but rather part of a pattern of increasingly frequent epidemics that have coincided with the interconnectedness of our global community and ongoing urbanisation.
We know that the risk of mortality or complications from events such as COVID-19 correlates with many factors, with health being one of those. Given that many of the risk factors of chronic diseases are lifestyle habits that can be modified, there is an opportunity to make a positive impact.
There is no doubt we must focus and support our customers now regarding the challenges associated with mental health and wellbeing. However, as an industry we must also think long-term and maintain our focus on developing clinically driven product solutions that both encourage and recognise the role of managing key health risk factors to improve health and ultimately mortality and morbidity outcomes. Ultimately this benefits the customer and creates greater health resilience in our community.
We need to build better, more suitable products for our customers
During COVID-19 we’ve seen two interesting customer behaviours: firstly, an increase in customers enquiring about life insurance and secondly, customers keeping their cover even during adverse financial times. The pandemic has seen many people come to the realisation that they need protection for themselves and their families. Whilst they may not necessarily be at the point of purchasing life insurance, they are aware they need it.
We must continue our focus on helping customers solve their protection needs. That means continuing to build better solutions, that are customer centric and designed for how and when they want to consume and interact with their insurance cover.
MetLife believes the life insurance industry must continue to embrace digital customer engagement and leverage data to build digital-first product solutions. Customer engagement and securing life insurance transactions is not easy, but we find ourselves in a unique period of increased awareness coupled with a level of vulnerability across our community. Solving these protection needs will require fresh thinking and a shift from the traditional insurance models to personalised customer-centric solutions that are focused on customer needs, interactions and experiences.
Dean Mulheron is Metlife Australia’s head of group product.