The COVID-19 pandemic has Australians experiencing a heightened awareness of their health and well-being. This makes it a good time to reassess their insurance needs.

Financial advisers have been on the frontline as clients look to confirm what their policies do and don’t cover when it comes to COVID-19. Others are looking to realign their coverage as household budgets come under pressure.

Research suggests Australians are taking a more active interest in their life insurance as the impact of COVID-19 on personal finances continues to be felt. On the one hand, insurance companies have experienced a marked increase in enquiries for life and income protection insurance. However, there is also evidence to suggest many consumers are rethinking their health, travel, life and income insurance due to financial pressure on household budgets.

For Olivia Sarah-Le Lacheur, GM Retail Distribution – Partnership Development at AIA Australia (formerly CommInsure), the current environment presents an opportunity for financial advisers to educate clients and ensure they have the right protection in place for their personal circumstances.

“AIA/CommInsure saw a spike in web traffic and phone enquiries in April, up by as much as four times the March volumes, but the numbers have normalised since then,” she says. “In April, when all Australians were in lockdown, people used that time to review their arrangements and prepare themselves for the potential uncertainty ahead.”

In this respect, insurers have arguably been the most affected of financial services providers in terms of consumer expectations during the pandemic. Advisers have been on the frontline as clients first asked for clarity around what their policies do and don’t cover before, in some cases, looking to realign their coverage as household budgets are carefully scrutinised.

Sarah-Le Lacheur says COVID-19 affects people’s plans in two ways: there are high levels of uncertainty, often of a financial nature, and a sharper focus for each individual on both their own health and that of their family.

“This is a perfect time for financial advisers to be checking in with their clients,” she says. “Their heightened awareness of their own wellbeing and how their health can affect their ability to work could mean they are receptive to a conversation about some new or different solutions to help them manage their future protection needs.”

Industry leadership

Sarah-Le Lacheur believes the COVID-19 pandemic could also be a turning point for the insurance industry. Day-to-day challenges such as supporting advisers and licensees with education changes, winning and maintaining consumer trust and monitoring licensee movement look very different through a COVID-19 lens.

“The industry has responded for clients during the pandemic, showing real leadership to quickly introduce measures that offer genuine benefits to people when they need us most,” she says.

For financial advisers this has taken the form of proactive support from insurers to ensure they reach their clients and support them effectively. Often this has meant the timely availability of client-ready materials that help advisers address existing clients’ questions and positions them to attract new clients.

Typical questions from clients may include:

• Does my life insurance policy cover me for COVID-19?
• Does my income protection policy cover me if I need to self-isolate?
• Can I increase the level of my insurance cover or apply for a new policy?
• Will there be any changes to the way in which you manage claims in light of the pandemic?
• What if I am facing hardship and struggling to pay my insurance premiums?
• Am I still covered as an essential worker?

For many Australians, life insurance is a complex product that is difficult to understand at the best of times, let alone in the midst of a pandemic. By applying their experience in partnership with the insurance provider, advisers can use this opportunity to engage with and educate existing and prospective policy owners about their insurance needs and the protection that life insurance policies can provide.

And beyond policy and claims information, Sarah-Le Lacheur says AIA has tried to assist by producing the AIA Vitality COVID-19 Insights report to highlight the small lifestyle changes that Australians have made since the COVID-19 pandemic hit and how these changes are impacting on their lives.