For our special series on insurance in the pandemic, BIV featured discussions with Melissa Carruthers, a senior manager within Monitor Deloitte’s strategy consulting practice; and Joshua Krenus, CEO of Alteri Insurance. What follows is an edited transcription of the conversations with BIV journalist Tyler Orton and BIV publisher and editor-in-chief Kirk LaPointe.
Melissa Carruthers, national life and health insurance strategy and transformation leader, Monitor Deloitte
When you look back at how the last seven-and-a-half months have gone, what are some of the biggest changes that you have noticed hitting the industry right now?
Carruthers: I think that this was a real wake-up call for the life and health insurance industry in Canada and globally. And when it comes to being digital, and working virtually, that is something that is previously unknown to this industry. We tend to rely on traditional processes, face-to-face interactions, face-to-face sales. And so this was one of the big catalysts that is starting to drive a lot of transformation in the industry.
So how are people selling insurance now?
Carruthers: A number of ways. They are still meeting with clients through an adviser. That continues to be the primary sales channel for life and health Insurance. But it’s through video calls or on the phone. I think a lot of consumers still really value the advice that adviser channels provide. Insurance is complicated, right? And it’s not something you buy on a regular basis. So they’re just continuing to do it through Zoom chats.
So have there been additional pressures put on the industry to adopt technology?
Carruthers: Definitely. And one of the biggest challenges was on the continuing momentum of new sales. So the adviser channel is the biggest priority for a lot of the insurance carriers, ensuring that advisers have access to the tools that they need to continue driving new business. And a big part of that is lead generation. So helping the advisers prospect, providing advisers new applications – tools that will allow them to continue to meet with new customers, those that they had been in discussions with pre-COVID – to be able to … continue the momentum in the market.
Do you anticipate that we would get a product specifically geared towards addressing COVID-19?
Carruthers: I don’t think it’s necessarily COVID-specific coverage, just because in Canada, our health system largely has us covered under universal health care. But it’s more about reigniting the need and the value of insurance because I think that that’s something that has kind of fallen off the table a little bit. With the millennial demographic, we don’t always see the value in life insurance.
Will mental health considerations have to come under even further consideration moving forward as a result of the pandemic?
Carruthers: Absolutely. Where we tend to see a greater emphasis on mental health, at least … within group benefits. That has become a primary focus. When you think about disability in the workplace, being on leave, a lot of absenteeism – even pre-COVID – was driven by mental health. And so as soon as COVID-19 hit, it was no surprise that concern around the mental health of Canadians was even more paramount for group benefit carriers.
Joshua Krenus, CEO, Alteri Insurance
How do you begin to respond to the pandemic? Where do you start?
Krenus: Whether it was right or not, [we] began by responding and continuing to help with regards to premiums.… We can defer premiums, we can lower premiums, we can extend your policy term, we can look at your business individually and try to help you out that way. And that’s kind of what insurers did. Very similar to other businesses, they tried to help out the wallet a bit instead of going after coverage. And now obviously, they’re going to have to start thinking, “OK, what are we covering with regards to stuff like this moving forward?”
Where did the pressure on the industry in terms of claims come in?
Krenus: We, as client-facing brokers, felt that everybody took it really well. They didn’t assume that there was coverage for something so strange. As this pandemic was coming upon us … everybody kind of worked together to find the right solution, which ended up being like the premium deferrals and extending terms
Might we see some larger premiums?
Krenus: The unfortunate fact of the matter is that it is now a new risk that has been realized. And that risk needs to be taken into account. And the only way to do that is to increase premium and to add coverage. One of the big things you’re going to deal with is business interruption. I think it will affect premiums moving forward, for sure.
What is the prudent course that you’re advising businesses on?
Krenus: I think even as brokers we have a much better understanding of what is truly at risk with each individual business. [The] kind of education piece I try to hand off is: forget about insurance and all that, just what is the greatest risk to you and your business? And let’s talk about insuring that.
Is [there] any kind of an advantage to be in B.C. now, the way that COVID is being handled, and what that might reflect in the kinds of policies and expense we might have?
Krenus: I think, yes, there is definitely an advantage versus, you know, certainly the [U.S.], and even our friends back east, because a lot of underwriters right now are realizing that we’ve handled this reopening appropriately, despite the inevitable increase in numbers. And they’re also, you know, seeing that operations have remained open since the reopening. And so these business interruption expense coverages, these liability coverages for their customers coming in are things that are remaining open and the coverage is still enforced for them.
Is there also emerging a real concern among insurers about things like the mental health issues involving employees and how that is interrupting businesses?
Krenus: Well, that’s a really good question. It’s one of the things that I’ve noticed from the group benefit side of the business is that there’s a tremendous placement of energy and focus on mental health, and actually, not only using their current policy for group benefits to add coverage that way, but they’re actually taking out separate plans, EAP plans for the purpose of mental health so that employees can speak to professionals on this matter, and they’re taking it very seriously. From an actual insurability, a claim made against a business for mental health, we’re not really there yet. •