LIMRA survey reveals impact of COVID-19 on US life insurance

LIMRA survey reveals impact of COVID-19 on US life insurance | Insurance Business

LIMRA survey reveals impact of COVID-19 on US life insurance

LIMRA has published the results of its latest survey, which sought to assess the effects of the COVID-19 pandemic on life insurers in the US and Canada.

LIMRA surveyed 47 US life insurers and 12 Canadian life insurers to find out if the insurers were making any changes to their business due to the pandemic and the resulting federal/state social distancing guidelines.

The survey generally found that there was no significant change in overall applications, but there was a shift in how customers applied for life insurance. A third of companies reported a decline in face-to-face applications, while a quarter said they saw an increase in online applications in March.

According to LIMRA’s survey, 24% of US companies that accept online/mobile applications for life insurance saw an increase in applications in March – but 56% of those that accept online/mobile applications reported no change. LIMRA also noted that the majority of companies saw no change in call center/mail applications last month.

In Canada, the majority of life insurers reported a decline in face-to-face applications. But five in 10 companies that accept online/mobile applications saw no change in their application numbers – only three in 10 of online/mobile application-accepting companies reported increases. Of the one in 4 Canadian life insurers accepting call center/mail applications, none saw any significant change in applications.

LIMRA also found that insurers were changing some of their business practices due to the pandemic. Over a quarter of US life insurers have expanded their automated underwriting practices, the survey found. One in five US life insurers have postponed/waived paramedical requirements. Some of the surveyed companies also said that they have added questions on COVID-19 exposure and travel to the underwriting process, are now requiring good health statements, accepting electronic health records, and are allowing historical exam and lab data instead of an exam. LIMRA also discovered that a “small percentage” of carriers are implementing premium limits for new coverage.

North of the border, LIMRA found that many Canadian life insurers have either made, or are planning to make, changes to their underwriting practices. Most companies are waiving paramedical requirements, while half are postponing exams until regular operations can resume.

The survey noted that Canadian life insurers are also extending grace periods, but only a few are offering other types of relief for customers financially impacted by the pandemic. LIMRA believes that this may change, since several of the surveyed companies indicated that they are still reviewing “possible changes.”