Insurance and life: the crisis generates an informed demand for insurance products

Dmitry Rudenko,

the General Director, Chairman of Board of insurance company “absolute Insurance»

Is that the crisis will change the insurance market, no doubt. However, the decline of the market, its inevitable, "care at distance" — these are just the most obvious consequences.

The events associated with ‘coronariana” are developing rapidly and, worse, are practically unpredictable. What consequences for the economy, individual industries and the people themselves will lead the restrictive measures, it will be possible to speak confidently only after they will be removed. As for the insurance market, the forecast of the all-Russian Union of insurers, in connection with the adverse external factors, its reduction may reach 30%. The extent of the impact of the coronavirus in the insurance market will depend on the duration of the pandemic and the pace of economic recovery, said the BCC President Igor Yurgens.

The Agency “Expert RA” presented a similar forecast for the development of the insurance market in 2020. According to analysts, there are two possible scenarios. In the first case – with the rapid end to the crisis and the recovery in economic activity early in the second half of this year, the total decrease will amount to about 17%. In the adverse scenario – with prolonged quarantine – the economic recovery will begin in the fourth quarter of this year, and the insurance market will be reduced by approximately 27%. Thus, the market can return to the year 2015.

The individual segments of the market will suffer more than others. The most vulnerable areas traditionally considered to be all types of voluntary insurance, especially life insurance, insurance against accidents and diseases, voluntary health insurance, property insurance of individuals, automobile insurance. Less than others will experience a drop in demand, the CTP segment.

We will remind, before the beginning of the pandemic coronavirus was expected that the market of non-life in 2020 will grow by 6–8 %, while life insurance will show stagnation. In April, under pressure of the situation much analysts have adjusted their forecasts.

The reason for the predicted decline in insurance premiums is not only to lower demand but also in the temporary closure of a large number of offices of insurance companies and their intermediaries. For example, in the current environment, multiple decreased number of functioning banks, which are the main sales channel for certain types of insurance, — such as life insurance. In addition, the citizens reduced the number of visits to the offices of the credit organizations to the most necessary. Tasks such as purchasing insurance, many put off until better times. Of course, if we are not talking about compulsory types of insurance, such as CTP. But here the key role is played by remote TV.

The obvious prediction is that soon we will see a significant increase in online sales. Even in those segments where they have not especially been applied. Already, more than 90% of the Russian insurance companies in a given volume use Internet solutions in MTPL, motor hull insurance, property insurance, voluntary medical insurance and others. More than half of insurers allow you to apply for a remote settlement of the insurance claim. Customers can download the mobile apps, instant messengers and personal account on the website photos of the damaged property and photocopies of certificates. After the formation of the application to the policyholder remains to wait for the benefit decision or direction for repairs (service station of the car, you can also choose in the app). Access your contracts through mobile apps and personal accounts on the websites of the insurance companies are the holders of investment policies and universal life insurance. They can pay the premiums under the contract and to claim insurance. What about the clients of voluntary medical insurance, which in the circumstances are much more likely to use the services of telemedicine.

In the future, the share of online sales and after-sales service in the insurance industry will only increase, as evidenced by the experience of developed countries. This process will be accelerated by the emergence of marketplace and insurance aggregators.

But there are less obvious effects of the crisis, in addition to the further digitalization of sales and “after-sales service” in insurance. So, despite the overall decline in demand can be expected to increase interest in products related to the protection of life, health, and medical care. Earlier, the Russians cared more about the insurance of the property risks associated with the loss of tangible benefits, the fact that “solid” – real estate, car and so on. Health also departed in this sense by the wayside. Such products as voluntary medical insurance policies, often designed for people employers. Now, citizens increasingly began to think about the necessity of insurance protection of life and health, on receiving qualified and timely medical assistance. Of course, these thoughts makes them unfavorable epidemiological situation.

 Thus, the demand in the field of insurance transformirovalsya toward a more conscious consumption, there is an understanding of the value of life and health. The result of this process, again taking into account the current situation, will be the accelerated development of telemedicine. Moreover, we will see it merge with the systems of telemonitoring. By analogy with the hull, where the telematics monitors the movement of the vehicle, and in case of an accident the client does not have anything to show the insurance company before you get paid. I must admit that very few people like to be the object of tracking. On the other hand, instead, you can get a special rate and a minimum of red tape upon the occurrence of the insured event. In the same direction will develop insurance products life and health. Wearable devices will become the familiar companions of many people and will allow you to get a better insurance offers.

For some, this may bring about certain inconveniences, primarily psychological in nature (“Why would someone in real time to monitor my health?”). But when you consider that we all now exist in the new reality – the isolation, access systems, telephone billing, video surveillance and so on, the wearing of such gadgets, it is unlikely that anything will substantially change in our lives. So, it makes sense to learn from everyday actions of benefits, including financial.

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