COVID-19 pandemic "acts as a catalyst for insurers and brokers to do things differently"

COVID-19 pandemic "acts as a catalyst for insurers and brokers to do things differently" | Insurance Business

COVID-19 pandemic "acts as a catalyst for insurers and brokers to do things differently"

Aviva Canada recently commissioned a survey to gauge awareness and sentiment around the impact of COVID-19 on consumers. The research, which targeted 1,500 Canadians aged 18 and older, delivered a number of key findings around employment status, transportation habits, and insurance purchasing behaviours.

According to the June survey, 13% of Canadians experienced a change in their employment status as a result of the coronavirus pandemic, with half of that group being temporarily laid off and the remainder losing their jobs entirely. Furthermore, half of Canadians reported that their household income changed as a result of COVID-19, with the financial impact ranging anywhere from less than 10% to as high as 75%.

One thing that almost all Canadians share is uncertainty about the pandemic and what the future holds. Three-quarters of survey respondents said they either have “a lot” or “some” uncertainty when it comes to planning for the future. Interestingly, while Canadians under the age of 30 were hit hardest by job losses or temporary lay-offs (with 27% reporting such changes to their employment status), this younger demographic was more optimistic about their employment situation improving in the third and fourth quarter.

In terms of transportation habits, the Aviva report suggests driving habits will see a steady increase in the fall to coincide with the return of the school year and Canadians being less willing to use public transport in the colder months. This is a shift from the height of the first wave in April, May and June, when 36% of Canadians reported driving 75% less and many approached their brokers to adjust their auto insurance policies to reduce commuting distance. As the situation turns around, brokers could see another spike in volume as Canadians look to increase their driving.

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Both COVID-driven employment status changes and transportation habits have contributed to shifts in insurance purchasing behaviour. According to the Aviva survey, 33% of Canadians are likely to shop for insurance over the next 12 months – a dramatic jump from the property & casualty insurer’s previous channel preference survey, which showed an annual shopping rate of around 11%. Furthermore, 19% of customers said they’re likely to change insurers over the next 12 months, with over 50% of Canadians seeking more competitive pricing as a result of COVID-19.

In response to the COVID-19 impact survey, Aviva Canada’s managing director of broker distribution, Mark LeBlanc, said: “The COVID-19 pandemic is unprecedented and we know that Canadians have a lot on their minds these days. At Aviva, we believe the insurance industry must do its part to help make things easier, simpler and better for customers during this challenging time.”

He said there’s a “silver lining” for the insurance industry, which is that the pandemic “acts as a catalyst for insurers and brokers to do things differently and reduce ambiguity” in multiple areas. For example, LeBlanc said now is the time to ramp up consumer education, especially when it comes to policy wordings for home and auto insurance – two major buys for the majority of Canadians. Brokers, in particular, have a big role to play in helping consumers be absolutely clear about what they’re buying and what they’re covered for.

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One significant finding to come out of the Aviva survey was that many Canadians still prefer human interactions, despite the growing presence of online insurance shopping channels. Most respondents are seeking omni-channel communication with their brokers, with the option of face-to-face, phone, email and self-serve platforms.

“Coming out of this crisis, the [insurance] sector could look fundamentally different: much more agile, secure, connected and digitally-enabled,” LeBlanc told Insurance Business. “It’ll be the insurers and brokers that innovate and keep up the pace with this transformation that’ll be the winners – whereas those who stick to the old ways are likely to lose market appeal. COVID-19 was the digital wake-up call the industry needed.

“At Aviva Canada, we recently launched a paperless solution for commercial insurance brokers, and we’ve seen an adoption rate of over 80% so far. With such encouraging response, we’re now transitioning to paperless in personal insurance. Brokers must move quickly to react to customers’ demands for omni-channel options for quoting, binding, billing and paperless policy options and Aviva is here to support them.”

Le Blanc added that while price remains a top consideration when it comes to buying insurance, providing customers with excellent service is also a key differentiator. In fact, over 40% of survey respondents said they will place more emphasis on service as a result of COVID-19, especially those in the 30- to 50-year-old age group. This, according to Aviva, may be a result of the long wait times some customers experienced when inquiring about COVID-19 relief measures and premium reductions.

“Here’s another opportunity for the industry to deliver better customer outcomes,” LeBlanc added. “On this front, Aviva continues to invest in technology and innovation to reduce claims cycle times, keeping customers connected throughout the claims process through traditional channels, but also via automated text messages.”