Life insurance is a sector where insurers are set to struggle against the vast number of claims, with France set to be hit the hardest, says GlobalData, a leading data and analytics company.
Out of the five* countries to have had the most confirmed cases of COVID-19, France has the highest life insurance penetration rate, according to GlobalData’s 2019 Global Banking and Payments Survey. Over half (57%) of French respondents have life insurance, compared to 38% of German respondents – the lowest of the five. Similarly, China has a penetration rate of 57%.
Beatriz Benito, Senior Insurance Analyst at GlobalData, comments: “There is a sentiment of confusion among worried policyholders who do not always understand the extent of their policy cover. There will be many questions over whether their life insurance policy would provide protection should they contract COVID-19 and pass away. This would be the case for most life protection policies, provided the application was accurately completed when the product was purchased. Some insurers, however, introduced pandemic exclusions on policies following the SARS outbreak in 2003 – although this is not customary.”
To mitigate losses, insurers are taking precautionary steps on new policies. Some insurers have introduced questions that reflect the known symptoms of COVID-19, including whether the individual is experiencing a high fever or any respiratory conditions such as shortness of breath or a continuous cough. If these symptoms are disclosed, the application may be postponed.
* The US, Spain, Italy, France and Germany