Catering to the needs of today’s insurance consumers

As consumer spending behavior and preferences are evolving due to various implications brought by the current global health crisis, health insurers are aligning their insurance solutions to cater to the changing needs of the public as well as sustain their growth in the now normal.

Since 2021, insurance experts have been advising health insurers to aid in the decision-making of consumers by providing a “safety net” that protects against future financial risk and uncertainty, and enabling digital channels to meet consumer demands while maintaining social distance for safety.

As insurers play a crucial role in the response to and recovery from the health crisis, adapting products and distribution models that provide value and support to consumers against uncertainty and risks during this unprecedented time is an essential business move.

On a positive note, a recent global survey on insurance shows that, mainly because of the pandemic, there is an increased desire for greater financial security that brought about a significant interest in obtaining health and life insurance.

In the Philippines, the COVID-19 pandemic has left many Filipinos jobless and without a source of income. The government has recorded 10% of the working population unemployed as many businesses were forced to shut down in 2020. It decreased to 7.8% in 2021, and is expected to further improve in 2022. This transition phase pushes Filipino families to cope up and realign their finances, which even makes the role of insurance providers more vital.

Analysts talked about how the insurers’ responses to the pandemic-brought financial implications have the potential to either ramp-up or decrease public confidence in the industry. As financial stress correlates with dissatisfaction, local insurance companies shared similar business strategies that they deemed efficient in raising, maintaining, and satisfying the consumers of health insurance today.

Filipinos remain committed in prioritizing and protecting their health by buying health riders to supplement their current insurance policies. The younger generation, in particular, has been learning the value of prioritization to stay resilient amid crises.

Compared to older generations, today’s young adults could also be considered as more cognizant of the impact of COVID-19 as a public health crisis and thus, they are taking the necessary steps to protect themselves not only from the disease but also from its financial burden.

With the quarantine and lockdown measures, majority of business ventures shifted to virtual contactless setting, including the insurance sector which has seen an increase in policy holders and potential consumers who prefer to connect with insurance agents via online platforms.

Earlier this year, the Insurance Commission issued rules aimed at relaxing regulations to allow the continued operations of insurers, especially those providing health products and services. One of these rules, which has been extended until the end of this year, authorizes the sale of insurance products through digital tools as they became a much more viable path to move forward even beyond the pandemic.

As critical as it is for insurers to quickly adapt their operations to the constraints imposed due to the health crisis, it is also important that they adapt a gender lens with their branding and engagement strategies, according to the International Finance Corporation (IFC), a global development institution providing investment advisory and asset-management focused exclusively on the private sector in developing countries.

In addition, as the public at large is anxious to find information and solutions to help them cope during this challenging time, IFC emphasized that it is even more important that insurers’ current communications and engagement strategies are consistent, present at all times, rooted in empathy, and that they meet the needs of women who now bear even greater responsibility for family caretaking.

Industry experts also suggest achieving greater outreach through partnerships for the distribution and accessibility of insurance products. They indicated that e-commerce platforms, retailers, and wholesalers can provide a powerful way for insurance companies to reach individuals and micro, small and medium enterprises (MSMEs) as these partners have a strong digital presence and a large consumer base at present.

Meanwhile, Ernst & Young Global Limited, a global leader in assurance and business consultancy, revealed on their 2021 Global Insurance Consumer Survey that a total of 46% survey respondents restated their awareness of how their insurance providers participate in CSR (corporate social responsibility) matters and as much as 58% of the respondents use company websites to understand and look for an insurance company’s commitment to CSR efforts.

This proves that a company’s commitment to CSR initiatives, such as labor practices, income inequality, and gender income inequality are important metrics that influence consumers’ purchase decision of health insurance.

The report also recommended realigning and innovating insurance products to fit consumers’ current expectations for pricing, bundling of policies, and payment options — this may vary as each generation of policy holders reveals unique needs.

Though consumer needs and preferences are evolving due to the pandemic, they are unlikely to revert to pre-pandemic demands, as insurance analysts foreseen.

Yet, local insurers, now more than ever, understand that investing in health insurance to acquire peace of mind in these changing times is the first step Filipinos take to attain a financially secure and healthy life after COVID-19. — Allyana A. Almonte