Insurers are taking a cautious approach to new business in the current Covid-19 environment, says a report by advisory, broking and solutions company Willis Towers Watson.
Its 34-page 2020 Insurance Market Update says that while New Zealand has been relatively unscathed by the pandemic from a risk benefits insurance perspective, insurers operating in the group life, income protection, and trauma markets are “…clearly of the view that the adverse impacts on the economy will continue as a result of lockdown in New Zealand” as well as the ongoing border restrictions, and impacts in other world economies.
The report’s authors write that economic impacts are likely to continue to lead to restructuring of business and lead to redundancies.
As a result, it says the market anticipates increases in mental health related claims across income protection and total & permanent disablement insurance policies.
The firm says that from a medical insurance perspective, medical insurers have experienced a low claims period over the recent past due to the deferral of elective medical procedures during the lockdown period.
However, it says medical insurers have looked to engage with their members over this period through the provision of a multitude of ancillary services and that in some cases, the insurers have been able to apply premium credits to insured members.
The company says that such a low claims period will inevitably mean, in the short term, that the costs of insurance are relatively lower than expected for the 2020-21 renewal year.
“We expect this trend of increasing ‘member engagement’ to continue into the future as the insurers look to use increased engagement to retain business and to impact behaviours in a positive manner,” says the report.