How the Pandemic Impacted Customers Insurance Needs & How Agents Can Better Help Them

How the Pandemic Impacted Customers Insurance Needs

COVID-19 changed things for a lot of people in a lot of ways, and the insurance industry is no exception. How has COVID-19 affected insurance needs? 

One of the most important effects of the pandemic was the fact that it highlighted and exacerbated financial insecurity around the country. This led to people finding ways to cut costs and streamline their budgets, and insurance was on the chopping block for many. 

For obvious reasons, online shopping became important during the pandemic, including shopping for insurance. The insurance industry has always been slow to adapt, but COVID-19 forced the insurance business to move online and this is one of the main examples of how COVID-19 has changed the insurance industry. After all, when trips to the grocery store were limited, no one was venturing out to visit their insurance agent. To put it into perspective, 41% of consumers said they were likely to switch providers due to a lack of digital capabilities. 

Both of these impacts meant insurance agents had to rethink their tactics; not only do they need to become more digitally-focused, but they also need to transition from an order-taker to a consultant for their clients in order to help meet their changing insurance needs.

The impact of COVID-19 on insurance consumers is still being felt. Here’s how COVID-19 has changed the insurance industry and exactly how insurance agents can better help their clients. 

The Changing Insurance Priorities of Consumers

Car Insurance

58% of Americans work from home at least one day a week, which means their cars are being driven a lot less. This can mean many people are paying for coverage they don’t actually need. This is an opportunity for insurance agents to help clients re-assess their car insurance coverage: should their coverage be reduced, or maybe a pay-per-mile insurance policy is a better fit? 

Plus, agents shouldn’t overlook potential discounts for their clients, now more than ever. Less driving over the last two years might mean your client is now eligible for a safe driver discount, or they might be willing to use a device that tracks their driving habits in return for a discount; after all, 72% of consumers would share some form of personal data in exchange for cheaper insurance premiums. 

Life Insurance

One impact of COVID-19 on insurance consumers was that the pandemic really underscored how unpredictable life can be, and predictably, that drove an increase in the demand for life insurance. In fact, 2020 saw record growth for the life insurance industry in the U.S., with life insurance applications increasing by 4% year over year, followed by a second-highest growth record in 2021 of 3.4% year over year. 

So, what does that mean for you as an insurance agent? You’ll want to ensure each of your clients understand the value of life insurance and consider purchasing a policy if they don’t already have one. After all, the best time to buy life insurance is when you’re young and healthy, and COVID-19 really helped highlight the urgency around that. And when a third of consumers don’t feel that they’re well informed about insurance, it’s your job as an agent to proactively correct that.

You’ll also want to highlight the benefits of whole life insurance to clients looking to provide a cushion for the future. After all, 51% of non-retired adults feel that the impact of COVID-19 will make it harder for them to achieve their long-term financial goals. The fact that whole life insurance comes with a savings vehicle will likely be of interest to many of your clients.

Small Business

The pandemic was an opportunity for many to reset. A record number of Americans quit their jobs during the pandemic and 60% of new entrepreneurs used the lockdown to learn about starting and running a business.

If you’re an agent that works with small businesses, you need to know this: about half of all businesses are based out of the home, and there are 31.7 million small businesses in the U.S. But what many people don’t realize is that if they’re running a small business out of their home, they likely need home-based business insurance on top of home insurance.

Home-based business insurance helps cover the supplies, merchandise, and equipment that are specific to your client’s business. If there’s a fire, your client will of course want both their personal belongings and their business supplies covered by insurance, but without home-based business insurance, they’re out of luck. And what’s worse is that an insurance provider can even void their home insurance policy if they make a claim without disclosing that they run a business from the home. 

Even if your clients aren’t running a small business but are working from home, their home insurance provider should know about it. There are considerations your clients might not have thought about, like if they’re using their personal equipment to do their job out of the home or the increased liability if clients are visiting them in their homes. As an insurance agent, you’ll want to ensure your clients are covered. 

The Bottom Line

The full impact of COVID-19 on insurance consumers is still being determined. As an insurance agent, you don’t want to use fear mongering and a pandemic as a way to boost your sales. But you do want to ensure your clients feel more financially prepared going forward, especially given the toll the last two years may have had on their finances and mental health. Tailoring your product recommendations to help them feel more secure is your job as an insurance agent, and your clients will stick with you for the long run because of it. 

The pandemic is an opportunity to check in with your clients and ensure they’re still happy with their insurance policies. Otherwise, they might start shopping around for what they need. As an insurance agent, you’re in it for the long haul with your clients; you want to build value for them by ensuring you can stay on top of their evolving insurance needs. 

How the Pandemic Impacted Customers Insurance Needs & How Agents Can Better Help Them