Covid-19 pandemic fuels demand for some insurance products

The insurance industry is still seeing strong demand for certain products despite the economic downturn. This comes as the finance and insurance sector is projected to expand this year, bucking the general economic malaise.

Insurers told The Straits Times they have sold more plans with lower premiums and shorter terms, as well as investment-linked policies.

In the first half of this year, AIA Singapore saw a 44 per cent year-on-year increase in sales of its AIA Power Critical Cover plan, which covers multi-stage critical illnesses and relapse, among other things.

“The Covid-19 pandemic has resulted in Singaporeans becoming more aware of protecting themselves and their loved ones in the event of critical illness, hospitalisation and death,” said Ms Tay Jin Li, head of product and funds development, implementation and distribution at AIA Singapore.

The insurer’s sales of single-premium investment-linked plans spiked 150 per cent. With single-premium policies, customers make a one-time payment in return for certain guaranteed and non-guaranteed benefits.

“The current economic outlook has resulted in a downturn in the investment market. Some customers have purchased single-premium investment-linked products, which are now available at a lower unit price, in anticipation of higher potential gains when the market recovers,” added Ms Tay.

Prudential Singapore’s head of product management Stanley Ng said protection solutions, investment-linked products and “products that are bite-size with lower entry-level premiums” are in demand. “Given the current uncertain economic outlook, these products are well received by customers who are looking for more affordable insurance coverage,” he said.

Meanwhile, Aviva Singapore said it saw a 19 per cent increase in new sales of protection products and a 23 per cent increase in sales of its single-premium products, such as its savings plans MyLifeIncome and MySecureSaver II.

Great Eastern also said it saw higher demand for its protection-related insurance solutions, such as its personal accident plans and term plans, and investment-linked plans, but did not provide figures.

Tokio Marine Life Insurance Singapore saw a 27 per cent increase in uptake of its term protection plans.

Without giving figures, NTUC Income too said it observed greater interest in shorter-term plans.

Covid-19 coverage

Insurers here have introduced measures to help customers affected by Covid-19. These include extending coverage on existing policies and creating new products that insure against the financial risks of Covid-19. Here are some of their initiatives:

AIA SINGAPORE’S COVID-19 SPECIAL COVERAGE POLICY

What it is: A free additional insurance cover giving eligible customers hospitalisation income and coverage for death due to Covid-19. Payouts: Almost $500,000 in separate claims has been paid out to 369 customers holding individual and corporate policies.

AIA has also paid out about $220,000 to customers – including about $30,500 for community isolation facility stays – under an integrated shield plan, and about $100,000 in hospitalisation fees under non-shield plans.

GREAT EASTERN’S COVID-19 CUSTOMER CARE FUND

What it is: A $1 million support package that provides hospitalisation cash benefits and covers death due to Covid-19. Payouts: As of June, the insurer had disbursed the full amount to 260 Singapore-based customers and their immediate family members.

In that month, it also launched its Great Comprehensive Care insurance solution to cater to self-employed people, freelancers and gig economy workers. The plan offers hospitalisation income and coverage for personal accident and outpatient care.

OTHERS

Prudential Singapore has a $1.5 million Prucare package to assist individuals and small and medium-sized enterprise customers affected by Covid-19. Disbursements are ongoing.

Along with other insurers, such as Aviva Singapore, Tokio Marine Life Insurance Singapore and NTUC Income, it has also extended Covid-19 coverage to policyholders under various plans.

Although the pandemic has raised awareness of the need for adequate insurance coverage, the sluggish economic environment could be a factor causing many people to hold back from making long-term financial commitments, said NTUC Income chief agency officer Tan Chuan How.

The General Insurance Association of Singapore (GIA) chief executive Ho Kai Weng said: “While we see lower activity in segments like travel, the ongoing pandemic is also driving demand for protection in select segments, such as cyber insurance and work-from-home insurance.”

Great Eastern, for instance, said it saw stronger demand for its HomeGR8 Plus plan that covers accidental loss or damage to building, renovation and home contents.

On the flip side, travel insurance was unsurprisingly affected.

AIA Singapore also saw an estimated 45 per cent fall in demand for products in its high-net-worth category, which covers areas such as legacy planning and estate liquidity, as consumers are more mindful about spending, and travel restrictions resulted in a decrease in such policies sold to overseas customers.

Asked about the outlook, GIA’s Mr Ho said the insurance industry is undergoing significant changes not only because of the global health crisis, but also due to the acceleration of digital transformation and automation. These trends are driving new roles in the industry, such as in data analytics, he added.

Meanwhile, employment in the life insurance industry rose in the first half of the year by 4 per cent year on year with 368 new hires, reaching a workforce of 8,650 employees as of end-June.

The Life Insurance Association Singapore told ST that most of the new hires are supporting distribution and sales teams. There has also been an increase in hiring for project and product management roles, and an ongoing need for more digital specialists, as insurers accelerate their digital transformation plans, it said.

Aviva Singapore is among the insurers that have undergone digital transformation recently. It said it has conducted digital training classes for its advisers and equipped them with a financial needs analysis digital tool, among other measures. “These new tools have made Aviva’s sales process 100 per cent digital and we have also seen an uptick in non-face-to-face sales,” it said.

Ms Goh Jia Jing, 24, a financial consultant with Advisors Alliance Group, has found it easier to meet more clients a week now that they are mostly working from home and able to meet virtually. She has 12 to 15 appointments in a week, up from 10 to 12 before the pandemic.

Ms Goh, who mainly discusses insurance and investment plans with clients in these meetings, said: “Attention spans are shorter online and we can’t build as much rapport over the screen. The key is to deliver the important point while keeping them engaged in the whole conversation.”

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