How Canada’s insurers have pivoted in the face of COVID-19

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Once the dust has settled, a new normal has taken hold and we have time to catch our breath to reflect on the COVID-19 crisis, we can begin to fully assess its impact. What we already know is that the pandemic’s widespread economic, health and social repercussions have transformed Canadians’ lives in countless ways. The longer-term ramifications remain to be seen.

But one, largely underreported, area where we’ve seen significant change is in the services delivered—and experience provided—by Canada’s insurers.

Innovation borne of necessity

Social-distancing restrictions forced an immediate service modernization across sectors that had remained mostly static for decades. While most had begun the slow migration to digital tools and platforms, their progress was glacial at best. A conservative approach across the financial and professional services industry had long promoted stability and consistency over rapid innovation.

That changed in a relative heartbeat.

As access to clients became limited or prohibited, for example, legal procedures in nearly every province were transformed within weeks. Emergency legislation permitted virtual document signing and witnessing as many individuals scrambled to finalize estate plans, close business deals or purchase properties as the pandemic peaked early on. Oft-discussed administrative innovations that had long lingered on the backburner took on new urgency and immediacy—and many have (or soon will) be made permanent. The changes weren’t limited to the legal sector, of course.

The delivery of government programs and still largely paper-based financial services were streamlined or transformed at the pandemic’s onset.  The insurance industry in Canada followed suit. Put simply, insurers took a giant technological and operational leap forward, doing a decade’s worth of modernization in about 10 months.

It’s no understatement to say that the way Canadians engage with their insurance providers has changed forever. Consider it an opportunity to access new and improved insurance solutions, often with simplified approval processes. Insurance has become less intimidating, more wellness-focused and proactive—and could well present new avenues to enhance financial security.

Breaking down barriers

If there was a perpetual gripe about the insurance experience in Canada, it revolves around accessibility and approval processes. High costs and onerous qualification and underwriting procedures deter many Canadians from seeking coverage. For business owners, professionals and high net-worth individuals who use insurance for everything from corporate coverage—to mitigate risk from the sudden loss of a key leader, for example—or on the personal side for disability coverage or as a wealth planning tool through life insurance, the industry’s recent (and rapid) evolution is opening new financial doors.

We’ve already seen insurers increase coverage limits to as much as $3 million for life insurance without requiring a medical, not to mention incorporating artificial intelligence into their systems to simplify qualification processes. Insurers are now accepting e-applications for most policies, meaning the days of paper-based applications are likely a thing of the past. In short, it’s easier for people to get greater amounts of insurance coverage, thereby ensuring greater financial certainty for themselves and their families.

The intimidation factor is also waning. In some cases, insurers are making it easier and more client-friendly to procure insurance without the inconvenience of an individual visiting their home to work through a medical questionnaire and take blood samples. Chalk that service enhancement up to COVID-19 and the effects of social-distancing measures.

A renewed focus on wellness

Another longstanding criticism is the reactive nature of Canada’s insurance industry. It’s long been argued that while insurers provide coverage for disability, critical illness or death, they do little to provide services that help mitigate mental or physical health issues before they occur. Increasingly, enhanced access to preventative services is being delivered, in particular on a virtual basis, due to social-distancing restrictions, but also of a desire for innovation on the part of consumers. And for good reason.

A 2020 Environics Research survey found that nearly 50 percent of Canadians said COVID-19 had impacted their ability to access healthcare. Around 70 percent of those surveyed agreed that ‘virtual healthcare represents the future of healthcare’ and fully 82 percent of working Canadians agreed that employers should provide virtual healthcare to their employees.

Doing exactly that could enhance nationwide productivity, improve the health of Canadians overall, and boost employers’ bottom lines. Consider the benefits of limiting the impact of mental illness alone.

A recent report by the Toronto-based Centre for Addiction and Mental Health pegged the annual economic burden of mental illness in Canada at a whopping $51 billion, with 70 percent of disability costs being tied directly to mental illness. The coronavirus pandemic has weighed heavily on Canadians’ mental health and is likely to have a long-term, lingering effect. Mitigating that impact through adequate insurance coverage will have a positive impact on Canadian society as a whole.

An embrace of preventative solutions

Now more than ever, people are in tune with their health, are seeking new ways to enhance wellness and want their insurers to provide necessary coverage (typically through their employers) to help them manage their physical and mental well-being. Canadians want better coverage in ways that suit their lifestyle needs, and the insurance industry has sped up its wellness-focused pivot in response.

This trend had been gaining momentum even before being kicked into overdrive by COVID-19. About five years ago, for example, Manulife introduced its Vitality product, a third-party wellness program attached to its life insurance offering that rewards plan members for living a healthy, active lifestyle. Policy holders can earn everything from hotel discounts and Apple products to Amazon gift cards and gym membership subsidies for achieving their wellness goals.

We can expect more products such as these to become available, changing the conversation from traditional insurance offerings to new and innovative options that help Canadians stay healthier and live better.

Positive wellness trends

Through the myriad challenges posed by COVID-19, there has been a great deal of positive change. Canadians’ access to effective insurance solutions, along with the way they interact with their insurance providers, are just two of them. We can only hope that this trend continues to accelerate in the years ahead and that carriers maintain their newfound focus on both health and wellness-focused solutions.

If they do, we all win.

The Bridgewell Team

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