The COVID-19 pandemic has been a catalyst for insurers to accelerate digital transformations and improve customer centricity. And, according to a new McKinsey report, that means insurers must change how they support insurance agents and help them become more resilient.
McKinsey surveyed 210 agents in China across all lines of insurance in late April and determined that even though the insurance industry was hit hard, agents are optimistic about the future.
Insurance agents see drop in business
Two-thirds of agents experienced a decline in business performance during the COVID-19 pandemic, mostly those with one to two years’ experience, while around 20 per cent of agents -- with five years’ experience -- reported an improvement.
Most of the decline came from policy cancellations and half said they would not be able to sustain their business for more than six months if new business and renewals remain at current levels.
Still, there is reason for optimism, says the report. Around 65 per cent of agents said customers have become more proactive in inquiring about insurance products and shown stronger interest in health, accident and critical-illness products as well as online medical services.
Insurance products starting to get more attention
In fact, health insurance is gaining traction, with the number of new health policies by product up 28 per cent in the first quarter of 2020 compared with the previous year.
Despite the challenges facing them, one-quarter of agents are “very confident” in the recovery of their business post-pandemic, and an additional 69 per cent are “quite confident.” Just six per cent said they were “not confident.”
The insurance advisors say the industry can help by continuing to invest in digital tools and advanced analytics, explore new products and services to meet a wide range of customer-protection needs as well as bring in remote health advisory and diagnosis tools.
“One thing is clear: insurers will need to change how they support agents to help them become more resilient in the face of the pandemic and prepare to thrive in the next normal,” said the report.
