Bolder Thinking Blog

Insurers’ role during COVID-19 pandemic: provide clarity and direction

March 19th, 2020 | Lizzie Egan

As COVID-19 spread into North America, the insurance industry sprung into action. Using email and organic social media to distribute messaging we have all grown familiar with in recent weeks, insurers reiterated CDC guidelines and assured recipients they are closely monitoring the situation. The effects of COVID-19 carry significant weight in the health, life, event, and travel insurance businesses; but, insurers are particularly experienced in managing crises and can leverage new technology and a human touch to assist and reassure their customers.

Health insurers reiterate the importance of prevention

Health insurers are familiar with flu outbreaks and were quick to respond to the spread of the novel coronavirus with prevention efforts, seizing the opportunity to remind members to practice good hygiene. Since this initial communication, executives from the largest health insurers convened in Washington, D.C. and determined testing for COVID-19 would be covered at no cost to consumers, which was quickly distributed to members via email and social media

Some insurers have launched creative outreach efforts. Through Aetna’s Healing Better program, members who are diagnosed with COVID-19 will receive a care package with over-the-counter medication and cleaning products. Oscar Health developed an extensive resource center which includes an online risk assessment survey to provide specific health directives.

In pharmacies like CVS and Walgreens, insurers promoted social distancing with free delivery for eligible prescriptions and encouraged the use of virtual consultations. While there has been an immense amount of pressure placed on the healthcare industry, this pandemic could increase the awareness and adoption of telemedicine. The virtual service can help decrease exposure, triage patients, and prevent overflow at medical facilities.   

Teladoc, MDLive, and Doctor on Demand (all telemedicine providers) have also relied on organic social, but omnichannel marketing is coming into focus as well. MDLive and Doctor on Demand both invested in Facebook ads to distribute prevention messaging. Perhaps a sign of what is to come, Teladoc has been utilizing podcasts to promote its services, spending more than $1.7M since December. Ads primarily mentioned Teladoc’s virtual mental health services, which is good timing, as it could also experience increased demand during these high-stress times. 

Panic shopping extends to life insurance

High-stress situations like this often result in widespread panic-shopping, which extends to the life insurance industry. As reported by Forbes, “LifeQuotes, a national online life insurance agency, reports a 29% increase in applications requested since January 20th.”  Because the traditional application process can take several weeks, many customers could turn to accelerated underwriting that insurtechs and traditional insurers are now offering. 

According to the Wall Street Journal, “to make enough money on policies sold, life insurers may need to charge much more, potentially discouraging people who may otherwise now feel a greater urgency to insure themselves.” Additionally, market instability will do damage to reserves, and insurers could suffer from accommodating those with existing term policies for which they have paid modest premiums. Insurtechs could be especially at risk in these uncertain times

Event planners and travelers shoulder the financial burden

Elsewhere in the industry, there has been an increased focus on event and travel coverage. The world’s largest insurers have learned lessons from previous health crises, including the 2003 SARS outbreak. Over the years, they’ve tightened up their policies, inserting communicable-disease exclusions to prevent potential losses. After SXSW 2020 was canceled, co-founder Roland Swenson confirmed that they did not have event cancelation insurance that covered disease outbreaks or city-wide emergency declarations. And for event planners scrambling to secure that coverage? They are likely out of luck. While insurers are still writing cancellation policies, nearly everyone that is currently offered is sure to have specific exclusions for COVID-19.

As for travel, insurers were quick to lay out what is covered by existing policies. AIG’s Travel Guard warned that illness is covered, but “fear of illness” is not, and understated that a coverage upgrade is necessary in order to cancel for any reason. As the outbreak spread, insurers began enacting moratoriums on writing new coverage.

As the COVID-19 situation continues to unfold, what do we expect from insurers?

  1. Build awareness of telehealth services, including behavioral health. Americans’ mind, body and spirit will be tested, and insurers now have innovative resources at their disposal in order to assist. Insurers can help direct consumers to resources about telehealth by bidding on telehealth-related search terms, with consumers likely googling telehealth following remarks made by President Trump on March 13, 2020.
  2. Transparency. According to Mintel research on the role of trust in financial services in the US, less than 5% of consumers trust insurance companies, so it’s important that insurers build rapport during a crisis. Consumers will crave a clear understanding of complicated policies and carriers must indicate policy details during application and claims so customers can react appropriately.
  3. Empathy. While there are difficult barriers for insurers to overcome in order to keep business stable, it must not be forgotten that customers will bear a significant financial and emotional burden. Insurance was designed to provide appreciation and relief, and insurers must offer up empathy now more than ever. Agencies and claims professionals will be increasingly important during this time of need and messaging must be proactive, transparent, and understanding.

It’s becoming more evident by the day that this pandemic will have a substantial impact on nearly every industry, and the insurance industry is no exception.

Lizzie Egan

Lizzie Egan

Lizzie Egan is a Senior Analyst at Comperemedia, with a focus on the insurance industry.