Relief for consumers, ongoing service, and changing ways of doing business – some of which may require support and relief from regulatory bodies – are all on the list of concerns insurers are grappling with in the wake of closures country-wide, in response to COVID-19.
All that said, life insurance companies are generally stable and well-capitalized, unlike those in many other industries. It’s estimated that more than 90 per cent of the industry’s workforce has effectively transitioned to working from home on a permanent basis, and industry associations like the Canadian Life and Health Insurance Association (CLHIA) say regulators are being particularly responsive to discussions about the industry’s needs going forward.
The Insurance Portal spoke with the CLHIA’s president, Stephen Frank, to find out more about the industry’s response so far, to discuss some of the unknowns the industry is currently grappling with, how it is adapting, and what the CLHIA and others are doing to help ensure smoother operations as the crisis continues.
Help for consumers
Across the industry, when the COVID-19 crisis first began, Frank says there was a coordinated effort on the part of insurers to waive the week-long waiting period for short-term disability benefits. Similarly, he says for those on short-term and long-term disability, where insurers would typically require physicians to complete forms and provide medical information, companies across the board have waived this requirement, in some cases providing ways for disability recipients to do self-assessments.
Similarly, in commercial trucking, he says all companies providing health coverage to those shipping supplies between the United States and Canada, have agreed to continue providing health coverage for that industry. Both of those coordinated efforts – to continue offering health insurance to truckers, and the decision to waive short-term and long-term disability requirements – were made in part, thanks to discussions facilitated by the CLHIA. “We’re always careful not to be doing anything that’s anti-competitive but in this instance it felt like the right thing to do,” he says adding the government did not mandate the efforts – they were things the industry decided to do in a proactive way to be supportive.
Demonstrating the value of insurance products
“Everyone wants to do the right thing and provide support for those in legitimate hardship. Advisors are facilitating those discussions with carriers and we’re providing one-off supports where it’s warranted. I think we’re all pulling in the same direction to try and get through this as smoothly as we can.” - Stephen Frank
“This has been done by all companies across the country in an effort to try and get that income support into people’s pockets,” he adds. “I think people are embracing this as an opportunity to demonstrate the value of our products, to demonstrate our stability and show that we’re here for them.”
Some companies have been additionally providing relief to the average consumer who’s been affected in some way by the virus, as well. Desjardins Insurance is one example. The company recently announced that it would allow clients to defer premium payments for up to 90 days if they have contracted COVID-19 or if they have been negatively impacted by the pandemic in other ways. The company has also said that it will accept company executive health assessments carried out within the previous 12 months, for new insurance applications, in lieu of required paramedical documentation that isn’t available for the time being.
On a broader scale, Frank says companies are making decisions about hardship support on a case-by-case basis. “Everyone wants to do the right thing and provide support for those in legitimate hardship. Advisors are facilitating those discussions with carriers and we’re providing one-off supports where it’s warranted. I think we’re all pulling in the same direction to try and get through this as smoothly as we can.”
The great unknown
Whether the crisis has resulted or will result in increased life or disability claims for the industry remains to be seen. Similarly, the long-term impact COVID-19 will have on companies is hard to determine, given that the pandemic’s effects in Canada have been felt for less than a month now. Its effect on underwriting and on application activity also remains to be seen.
“One of the things we are watching closely, if people are required to stay in their homes for long periods of time, one would anticipate some (increase in) mental health claims,” Frank says, adding that companies are doing what they can to support to their employees, in an effort to guard against that possibility. “The other big unknown, is whether this is a three or four month issue, or if this is really a long, protracted crisis. How effective are some of the government programs that have been put in place? We won’t know for a while yet about how it’s all going to shake out.”
Changing processes, product challenges and business as usual
Having an entire workforce shift to working from home, all while call centres were being overwhelmed, was probably one of the first tests of the industry’s business continuity plans that occurred, as measures were being put in place by local and federal governments to contain the virus. Frank says those business continuity plans all kicked in as designed, and companies are now settling in for the long game, with the bulk of their employees working from home. “We’re continuing to serve our clients and advisors much like we did before,” he says. “We want to make absolutely sure that those benefit payments and those retirement payments, other annuity payments and all those things continue uninterrupted. That’s a huge focus for us and our real priority.”
He says being declared an essential service so that the small percentage of those who do need to work at a physical location can continue to do so, was one of the first discussions the CLHIA engaged in when governments were making their lists of essential workplaces.
“It wasn’t a hard discussion, but we did need to bring it to their attention,” Frank says. “We haven’t had any issues, but we did reach out to make sure we weren’t forgotten.”
Although the industry is open for business, meanwhile, there are certain coverages that may become difficult to underwrite in the near future. Large policies in particular, those which generally need to be fully underwritten, with fluids, will likely see delays, as most paramedical services providers have closed their offices. “For smaller policies, there’s a lot being done without the need for any fluids now. Those will continue to go out the door,” he says. “Companies are looking at their limits for no-fluid underwriting. I think you’ll see everyone taking a hard look at that.”
Regulatory engagement
Finally, in addition to the efforts the CLHIA made with provincial governments to get insurance declared an essential service, the organization is also in talks with the Canadian Council of Insurance Regulators (CCIR) to discuss market conduct requirements and the need to be flexible about requirements that exist today, such as the need for face-to-face meetings, the need for “wet” signatures instead of electronic signatures, the need for certain document storage capabilities, for physical delivery of policies and more. “A lot of these things don’t work well when everyone is self-isolating in their houses,” Frank says. “We’ve had good discussions with the CCIR. They understand and they’re open to providing flexibility to help us through this period. Those discussions are happening.” He adds that the CCIR has asked the CLHIA to itemize top priority items for discussion. “It’s important that we look at ways to do things differently in this environment.”