Covid-19 has significantly impacted financial stability across key markets, with up to a 1/3 feeling overwhelmed and anxious about finances.
The impact of COVID-19 pandemic may bring in a material change in the way we buy insurance covers. When it is about health insurance, the health issues and the cost of hospitalization due to coronavirus outbreak is expected to bring in a lot of changes in the way the policies are structured. The insurers also need to be one step ahead in designing products that are more policyholder-friendly in the post-COVID-19 environment.
Swiss Re Group, one of the world’s leading providers of reinsurance has recently conducted a survey to understand how the COVID-19 outbreak has impacted consumer sentiment towards their financial situation, overall health, and future insurance purchases.
Here are a few interesting findings of the survey:
- Covid-19 has significantly impacted financial stability across key markets, with up to a 1/3 feeling overwhelmed and anxious about finances.
- At least 1 in 3 people in these markets searched for new policies and about 1 in 4 purchased a new policy during this period.
- In the past three months, life insurance and health insurance have been considered as the most significant policies in India, by nearly 39% and 63% respondents respectively.
- 64% of the consumers surveyed are concerned about their mental health – the highest of all surveyed markets
- Indian consumers are the second most active in APAC when it comes to searching for and purchasing new insurance policies.
- More than half of the consumers (61%) had been contacted by their insurer, with 65% intending to purchase insurance as a result
- One in five Indian consumers in Mumbai or Bangalore are feeling anxious and “barely coping” when it comes to their finances as a result of COVID-19, while a further eight per cent are feeling overwhelmed and unable to cope.
- To make up for this financial strain, many Indian consumers were happy to sacrifice home / motor insurance (28%) while a quarter would cut life insurance premiums (25%) to help ease the burden. These were some of the highest figures in the region.
- When it came to health issues brought on by COVID-19, social disruption was the biggest concern (71%), followed by physical fitness (67%) and the inability to care for others (66%). While it was last on the list, mental health issues resulting from isolation and loneliness was the highest of any other market – for 64% of Indian respondents.
- A huge majority (68%) felt that insurance helped to ease their stress and provide financial support during this time and 78% said that their claims experience matched their expectations.
- More than any other surveyed market, a higher number of Indian consumers noticed additional benefits after researching policies recently, with 63% saying they discovered new features such as COVID-19 testing and unlimited hospital cover.
The Swiss Re commissioned poll of 1000 residents in Mumbai and Bangalore was conducted by global market research company, Ipsos, in the last week of May 2020. The same survey was conducted in the APAC economies of Australia, Singapore, Hong Kong and the Chinese megacities of Beijing and Shanghai in April. The data was collected in local language via smartphone, laptop or tablet devices.
What to do
Those looking to buy health policy may compare premium across 2-3 preferred insurers and buy the cover at the earliest. The exclusive Coronavirus health covers provide coverage from day 1 and hence may also be considered. Among the plans, one may consider an Individual plan or a Family Floater if the one has a small family. In the case of life insurance, buying a term insurance plan with a cover of at least ten times of take-home income fits the bill as they are low-cost, high cover plans.