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Challenges Faced By The Insurance Sector Due To Lockdown

The insurance sector is not immuned to the challenges other businesses are facing in this era of COVID-19 pandemic.

Looking at the sudden surge in the volume of traffic we’ve reached from people searching challenges faced by the insurance industry in this lockdown period, it’s an indication that insurance companies, agents and policyholders are seeking to know if they are alone in this mess or not.

If that is you, it’s okay to tell you that you are not alone. In the United States alone, despite the billions of dollars that have been spent to help cushion the effect of the coronavirus pandemic, over 100,000 small businesses have been shut down.

The small businesses that are going to be worse-hit will be those that never paid attention to getting affordable insurance coverage, be it health, home, life or even auto insurance.

The first outcome of this COVID-19 when life returns to normal is that no one will ever ask again why they need life, business or health insurance coverage. Entrepreneurs, including employees, will start seeing insurance as a must-have policy.

In this article, you will learn:

  • Challenges insurance companies, agents and clients are facing due the lockdown
  • What insurance companies are doing to respond to the impact of the COVID-19
  • How to reach your insurance company
  • And how insurance companies can meet the needs of their clients.

Here are top challenges faced by the insurance sector due to the lockdown and by extension COVID-19.

1. Increase in customer inquiries

Most insurers are demanding that their customers contact them through phone calls only for the most urgent inquiry.

What they are trying to say that is their customers will have to read about everything else they need to know on their website.

Some insurance companies in the United Kingdom have reported that they are getting as much as 1000 percent increase in customer inquiries, claims and complaints relating to their travel insurance.

Insurers will have to keep up with this to avoid messing up with their company’s reputation. This is the best time to prove how effective your customer support system is. You can tap on it to acquire more insurance clients in post-COVID19.

Related: Legitimate Ways Life Insurance Agents Steal Customers from their Competitors

2. Poor digital technology is harming some insurers

We’ve always said it time and time again that there’s a limit to what you can achieve in this modern world of business if you are not aligned with digital technology.

Most insurers that will be hard-hit by the impact of this coronavirus pandemic will be those that their operations and processes are not digitized.

No matter how passionate you are about your job as an insurance agent, right now, you can’t invite a client to your office or even book an appointment offline with them. It, therefore, means that if you’ve not learned how to use digital marketing to generate and convert insurance leads online, or even keep up with your existing clients, then be ready to pack up.

You can hire a reputable digital marketing agency specialized in generating high-converting insurance leads.

Insurance companies with more advanced digital underwriting, claims, and administrative processes are in a stronger position to survive the impact of coronavirus on the insurance industry.

Related: How Coronavirus Will Affect Health Insurance of Employees in Florida

For paperwork where the physical presence of the policyholder is demanded by the U.S. regulatory law, insurers have tried to play alongside with that even though it’s been difficult to handle. In Hong Kong where wet-signature is still demanded by federal law, digitization has not changed it.

3. Increase in life insurance claims

Policyholders are asking if death caused by COVID-19 will be covered by their life insurance company.

The answer is a resounding, YES! Death caused by any health-related issues will be paid to the nominee of the deceased after he or she has filed a valid life insurance claim.

Related: Different Claims Covered by a Personal Injury Attorney. Find Out If Yours is Covered

As it is today, life insurance companies are going to be badly hit if the government of their country is complacent about reducing the death toll. This is a big challenge facing the insurance industry – there’s little or nothing they can do about it.

Multiple death claims can make a life insurance company run into multiple debts. In India, life insurers have been asked to comply accordingly when life insurance claims are filed. 

To avoid claim denial, it’s always advisable to purchase your insurance policy from a reliable life insurance company. Here’s an article that will teach you how to choose the best life insurance company near you.

Related: How Good Insurance Companies Handle Claims

The impact of the COVID-19 pandemic on the insurance insurance

Since the emergence of this disturbing, extreme pneumonia, the volume of health, travel and business insurance claims have significantly gone up. 

Those that still have access to spare cash are signing up for life insurance coverage in case anything happens to them. Of course, you should expect it to be high. The volume claims made in the past few months have also significantly gone up.

And insurers are not failing to keep their communication channel open so that they can entertain as many inquiries as their customers might have. 

Some insurers with more advanced tech teams have also incorporated a self-service option on their website to help reduce the volume of inquiries they receive through phone calls.

There’s also random rumours that investors will be exiting soon should these claims keep coming while the pandemic remained untamed. The travel and tour insurance niche are the worse hit.

Related: The Impact of Insurance Fraud in the US

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