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How the pandemic has accelerated change in the insurance industry

08 November 2021 Isaac Mudau, Chief Operating Officer: Funeral and Group Risk Business at BrightRock
Isaac Mudau, Chief Operating Officer: Funeral and Group Risk Business at BrightRock

Isaac Mudau, Chief Operating Officer: Funeral and Group Risk Business at BrightRock

It’s been 18 months now since the pandemic came into our homes, businesses and communities and introduced a new normal. Eighteen months of uncertainty, loss and adaptation.

Our lives have changed, both personally and professionally, and we are only now returning to some semblance of normality, albeit in a very different world. But despite all this turmoil, the indomitable strength of South Africans has shone through, and we have turned many of the difficulties brought on by COVID-19 into opportunities.

The life insurance industry has been one of those sectors that has risen to the challenge that the pandemic has created and stepped up to ensure its clients remained well protected during a time when they needed us the most. I have seen this particularly in the group risk and funeral cover areas of our business and been proud of how our industry has been agile enough to adapt to the changes brought on by COVID-19.

The opportunity to better understand our clients’ needs
One of the ways that the pandemic has changed our industry is that it has emphasised the importance of sitting down with our clients and getting to understand what they need most from our products and indeed from us as a sector. All life insurance companies have seen a dramatic increase in claims since early last year, particularly in the funeral and group risk space, as mortality rates in our country have risen.

The industry could have buckled during this high claims period, and its reserves and resources were tested. However, what we saw instead was that our industry is resilient and sustainable, and that it is committed to servicing clients and meeting their needs. At BrightRock, for example, we have nearly two million lives on our books for funeral cover, and we wanted to ensure that we kept paying claims within 48 hours so that we could lessen the devastating burden placed on families. It also became even more critical for us to do more than just underwriting the policies and settling claims. We increased our focus on regularly liaising with the funeral parlours as they assisted their clients with the claims requirements. In this way, we were able to keep in touch with what our clients need from us. The pandemic demonstrated the importance of having cover, resulting in an uptick in the number of new clients, an increase in the number of beneficiaries on policies, and more clients wanting to enhance their cover.

The opportunity to redesign our products
With the pandemic highlighting how critical it is to have cover, the insurance industry has also seen how important it is to focus on the design of our products, our pricing and our distribution. Now more than ever, we need to be focused on careful monitoring and reporting, ensuring that we fully understand how our clients’ cover performs for them. This enables us to refine our views on how we price products and ensure that they are distributed correctly through the right channels and to the right people. The industry has started devoting more focus to improving our client's experience of the journey of our products, and that is of immense value to policyholders.

The opportunity to engage with our clients differently
One of the effects of our recent crisis is that businesses and wallets have been hit hard. Many people have lost their jobs, companies have had to downsize or close their doors and consumers have tightened their belts. As insurers, it was key to anticipate this economic impact and recognise that for businesses and consumers, less revenue meant the diminished ability to service policies. For the group risk sector, we at BrightRock started engaging with individual employer groups to understand their unique challenges, especially in those industries that were likely to be hard hit by the pandemic’s ripple effect. We then implemented solutions relevant to each industry, such as reduced cover for a certain period, so that employers could sustain their cover. In this way, companies were still able to provide for their employees and their families during the crisis, who also avoided a situation where they would have undergone additional underwriting should their policies lapse.

COVID-19 shone a spotlight on the importance of cover, and our sector has been able to show how they can assist policyholders at a time when having insurance is critical. We have had to adapt to the circumstances that have been created for us, and clients have seen the benefits of an industry that can be agile and meet their needs. The pandemic has allowed us to engage with our clients on a different level, and be more analytical about our products and how we communicate about them. As an industry, we have the strategies in place to tackle the next challenge that comes along, whether it be the next wave or another obstacle.

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