03 Mar 2021
Posted in Insurance
COVID-19 has reduced banking channel’s ability to sell critical illness policies
The COVID-19 pandemic has forced insurers to digitalize and this is particularly complicated in life insurance, which has led to the banking channel, in particular, losing market share, according to GlobalData, a leading data and analytics company.
GlobalData’s 2020 UK Insurance Consumer Survey indicates that one of the life insurance markets to have seen an impact of social distancing measures on the sale of policies is critical illness.
The biggest impact of the COVID-19 pandemic on the share of policy sales by channel can be seen in the reduced popularity of purchasing via the banking channel, which in 2019 accounted for 18.2% of sales but fell to 11.3% in 2020.
Daniel Pearce, Insurance Analyst at GlobalData, comments: “With the banking channel being reliant on more traditional methods of selling policies through branches, the impact that social distancing measures have had is clear to see. While providers in other channels are well established in the sale of policies through digital channels, those in the banking channel have clearly struggled to make the necessary changes in order to remain competitive.
“The fall in the use of the channel is likely to have been further exacerbated by the period when the housing market was largely shut and mortgage advances fell considerably, indicating that the ability to cross-sell critical illness during the mortgage process was essentially ceased.”