Adapting through innovation

By Bjorn Biel M. Beltran, Special Features Writer

The impact of the coronavirus disease 2019 (COVID-19) pandemic can be felt in all aspects of the business community, even as the rollout of vaccines begins in earnest. Though the end to the crisis may be in sight, it is certain that many of the changes that have happened over the past year will leave a lasting legacy for years to come.

In the insurance industry, where there is a heavy emphasis on the client-seller relationship, the challenge of maintaining such relationships over the government-imposed community quarantine is considerable.

“Traditionally, selling insurance relies heavily on the relationship between a seller and a customer. Sticking to the old way of insurance selling during this time may disrupt the customer journey at some point, especially since lockdowns pose a challenge to face-to-face meetings,” Surendra Menon, chief executive officer of BPI-Philam Life Assurance Corp., said in an e-mail.

Sun Life of Canada (Philippines), Inc. Chief Executive Officer and Country Head Benedict C. Sison further noted that severe mobility restrictions made it difficult to reach the insuring public, hampered the licensing and recruitment of advisors, and interrupted their client servicing.

“Lockdowns also redefined the definition of the office, forcing insurers to pivot their operating models. Market volatility kept clients on the sidelines and cut down investment earnings,” he said.

Yet, one way that the industry has adapted to these challenges, Mr. Menon pointed out, is through digitalization.

“BPI-Philam began embracing digital transformation before the pandemic even began, so shifting to online selling was not really a huge concern. However, we recognized deep into the lockdown that there was still work to be done and so we focused our time and resources in empowering our digital capabilities,” he said. “Through digital selling, insurance becomes more accessible to customers and allows more Filipinos to stay protected from the unexpected.”

Innovation has become a major theme throughout the business world during the COVID-19 crisis, and it is none more evident in the insurance industry. Mr. Sison said that the challenges imposed by the pandemic have led to opportunities in creating new innovative solutions and digital initiatives aimed at serving their clients.

All the while, regulators such as the Insurance Commission welcomed the digitalization of the industry, even going as far as introducing temporary licensing to advisors.

“For us at Sun Life, it was also a chance to try a new model for our workforce. While we already had a work-from-home program in place, we were able to test our limits as the entire organization went into telecommuting mode during the first few weeks of the lockdown,” he said.

On the customer side, the uncertainty brought about by the pandemic has increased the public’s consciousness about health and security, leading to an increase in the appreciation for insurance products.

“When lockdowns began in March 2020, most local insurance companies’ sales declined. This was expected since cash flow became an issue in the short term. However, because of the uncertainty surrounding COVID-19, more customers were made more aware of the benefits of insurance, which boosted consumer curiosity for protection products,” Mr. Menon said.

“There was a sharp increase in curiosity for health and protection solutions, which we experienced when we launched MedLife Protect Plus, our investment-linked life and health insurance product that gives considerable protection and better access to medical care with minimal out-of-pocket expenses. When our Bancassurance Sales Executives (BSEs) touched base with our clients, the feedback they got was that protection products were becoming more relevant in their lives due to the risks brought about by the pandemic,” he added.

This shift in public consciousness was evident all over the industry.

“We experienced a shift in preference to more health and traditional products. Likewise, we saw more participation from our younger client base. For Sun Life, market volatility also translated to a negative impact on the value of assets under management and unmet investment earnings plans. We have been providing clients information to reduce the paralysis in making financial decisions by raising their awareness of other options,” Mr. Sison pointed out.

“The heightened appreciation for health also allowed the company to launch a number of health solutions, further enabling us to achieve a healthier balance between traditional and VUL (Variable Unit Linked) products in a primarily VUL market,” he added.

The economic impact of the global crisis is likely to be felt for years to come. Until an economic recovery can be achieved swiftly and millions of affected Filipinos can recover their livelihoods, the uncertainty over the future will linger.

Mr. Sison said that while this lasts, health will remain a top priority among Filipino families as many Filipinos realize that nothing is more important than their and their loved ones’ life and health.

“With the economic impact of this crisis, many Filipinos realized their financial vulnerability and this has made them more appreciative of the security that our financial solutions can offer, particularly those that provide some savings or investment component, as well as health. In a survey we conducted with our clients, one thing they said they would really like to have more of is financial advice,” he said.

“This is most relevant to our industry as protection of life and health is what insurance is fundamentally all about,” he added.