Insurers from Hong Kong, Malaysia and Singapore reveal how they are coping.
Welcome to the new normal.
The coronavirus pandemic has upended every aspect of human life, from financial services to sporting events. Governments have imposed lockdown measures in order to reduce movement, and people have foregone their plans and remained at home lest they catch the virus. Massive losses in earnings have resulted in company closures left and right; whilst investments have been put aside to prioritise relief and stimulus measures.
Insurers across the planet are not immune to the detriments of the pandemic. According to a sector report by Moody’s Investor Service, the virus can directly affect the sector through the surge in claims, whilst an indirect effect manifests itself in market fluctuations and the unfavourable impact on business volumes. In particular, heightened mortality rates could trigger an increase in claims for life insurers. The exposure of P&C insurers may be limited although some subsectors may be affected, the report said.
As an example, the indirect effect on business volumes is already being predicted amongst life insurers in Hong Kong, S&P Global Ratings said in a separate report. Revenue and profits are in hot water due to a challenging operating environment made worse by the pandemic. The Hong Kong Insurance Authority’s decision to allow products to be distributed through methods that don’t involve face-to-face contact is a sign of an elevated pressure in the industry, the report added.
If anything, the pandemic has also brought about some key changes in the day-to-day operations of insurers. Lockdowns have forced some to switch to online platforms to maintain relationships between agents and clients, which also led to insurers prioritising the development of their digital tools. Some regulators have allowed products to be sold over the Internet, highlighting the need of the industry to evolve and adapt to changing environments and customer needs. Products themselves have also been upgraded to provide more coverage and benefits to clients who have been hospitalised or have died due to the virus.
To learn more on what’s happening on-ground, Insurance Asia spoke to numerous insurers across the Asia-Pacific region to see how they are holding up amidst the crisis. We asked them about the immediate effects to their business, the changes they have implemented to help their customers and employees and what their plans are once this crisis is over.
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