The IPMI market is set for a period of continued growth as the COVID-19 pandemic has changed the perceptions of the public towards the value of health cover.
The reopening of international borders, as the vaccine rollout continues, has created a steady movement of staff and their families globally.
However, the pandemic has left a deep impression and the recognition of the need for adequate health cover has increased exponentially.
As the pandemic eased, an extensive Swiss Re survey across employees in the major Asian markets which found the fears for their financial futures were accompanied with concerns over access to healthcare.
“The rising awareness of health and mortality risks are key factors that drive strong growth in risk and health insurance premium, even in the middle of the COVID-19-triggered economic recessions.” said Irina Fan, Head Insurance Market Analysis at the Swiss Re Institute. “For instance, in 2020, health insurance premium maintained double-digit growth of 10.5% in APAC, in contrast with the previous Global Financial Crisis, when health-related premium growth slowed down sharply.”
Health insurance remains top of mind for consumers, with medical reimbursement and critical illness ranking as areas that consumers are keen to seek more protection in the future. The stress of the pandemic has also made insurance customers more price sensitive.
Swiss Re’s survey also found that, across the markets surveyed, 80% of respondents said price is the most important factor in insurance purchase decisions (up 5% from 2020).
COVID-19 has also prompted greater attention to policy coverage. When asked, 33% of respondents in the region rated breadth of cover as the most important insurance element – this is of particular importance to buyers in Mainland China, Hong Kong and Malaysia.
The survey further highlighted how the pandemic has promoted more proactive management of personal health and increased emphasis on mental wellness. Across the region, 71% of respondents indicated they are practicing stricter personal hygiene habits, 50% implementing healthier diets, 48% getting more exercise and 40% practicing better sleeping habits.
Interestingly customers now see digital access to process transactions and speed of claim processing/payment as standard offerings when looking for policies. In Asia in particular this comes as little surprise as the use of technology in the sale of financial services was already accelerating before the move to remote operation during COVID.
However, the market would be remiss should it think that the drive towards the use of technology is restricted to Asia. Such has been the increase in the use of technology in mature markets such as the US and UK, that the UK regulator has announced it is to create a new set of rules for the use of technology within the insurance transaction, from marketing to the policy itself.
It comes with a regulatory demand for greater clarity as part of the drive to treat the customer fairly.
The rise in technology creates a dynamic for the IPMI market. The benefits that come with an increased use of technology in terms of the speed of process and the reduction in frictional costs are becoming increasingly clear. This is coupled with a growing demand from members and potential clients for the delivery of products via technology platforms.
It comes with a regulatory demand for greater clarity as part of the drive to treat the customer fairly.
At the heart of the process is the intermediary, keen to build on their relationships with the insurers, and faced with a rising demand from clients who want a faster quote and bind process.
Brokers are reporting that clients are asking more questions and seeking more information in which to make their buying decisions.
It creates the demand for a platform on which brokers can access policy details, electronically submit proposal forms and receive quotes in hours rather than days.
The pandemic has created a momentum for digitalisation within the insurance sector. The IPMI sector will not be immune to its impact and is now it a position where it needs to respond.