By Brooks Tingle | July 20, 2020 at 10:57 PM
John Hancock's president says the pandemic has accelerated a
process that was already under way.
(Credit: CDC)
Across industries, companies have acted and
adapted quickly to meet customers’ needs during COVID-19. Ours is no exception.
The life insurance industry was already
undergoing a transformation before COVID-19 hit, but the pandemic created a
paradox that underscored the need to accelerate that transformation. While
there was suddenly unprecedented demand for life insurance, there were also unprecedented
challenges to meeting that demand.
The pandemic also cast light on trends that
are likely to fuel our future trajectory. COVID-19 is reinforcing the important
role life insurance companies can and should play in society and the value we
can offer our customers. More importantly, it has highlighted what we must do
to continue to deliver on our commitments in a meaningful and relevant way.
In April, Aite Group reported
that mortality claims in the US resulting from COVID-19-related deaths this
year could range from $4.8 billion to $7.2 billion.
That is a staggering figure, but more telling
than the dollar amount are the people and families behind those claims. At its
core, life insurance is personal. In several cases in recent months, the
individual who passed away had been a John Hancock customer for 80 years. We
have also seen spouses pass just days apart from one another. Those are the
moments that give us pause. A claim is not just as a policy number or a death
benefit amount, but a person with a unique story. Our job is to process claims
quickly and efficiently, without losing sight of the bigger, human picture. The
pandemic did not change this, but it did bring it into sharper focus. We need
to be there for our customers and their families — real people with real
challenges — and fulfill promises we made to them, sometimes decades ago.
While the claims remind us of our essential
purpose of fulfilling promises made to customers long ago, this environment
also reminds us of the need to serve prospective clients better so that more
people can get the valuable protection that comes with life insurance. As
people are suddenly much more mindful of their own mortality, they are starting
to think, ‘How prepared am I? Would my loved ones be protected if something
were to happen to me?’ COVID-19 has underscored the value of life insurance,
but the resulting demand only proved that we, as an industry, have work to do.
More people want life insurance, but earlier this year we struggled to deliver,
handicapped by our own design and social distancing.
Long before COVID-19, we were working hard to
change the life insurance sales process — it’s a lengthy, cumbersome one that
involves labs, doctor’s visits, documentation and in-person meetings. The
pandemic made all those steps impractical, if not impossible. Fortunately, we
had already made significant strides toward transforming the buying process in
terms of investing in technology and growing our access to electronic health
records (EHR) when social distancing became the norm. In some ways the pandemic
accelerated our efforts and we have been able to rise to meet the demand. We’ve
expanded existing digital capabilities, leveraged electronic signatures, and
harnessed new ways to gather pertinent health data. It’s working. The new
challenge will be to keep the transformation momentum going when we are able to
return to some of our previous ways.
While we are always mindful of the tragedy
this pandemic caused for individuals, families and communities, moving forward
we see opportunity to drive meaningful change within our industry and beyond.
First, social distancing has impelled the adoption of digital technology among
carriers, distributors and consumers. During the pandemic it was out of
necessity, otherwise business simply would have halted. But really, digital
adoption in life insurance is a reflection of larger macro trends. We need to
meet the modern consumer where they are, and in an age when you can get
anything from groceries to a mortgage online, the life insurance purchase
experience needs to be digital, fast and convenient.
By collaborating with like-minded distribution
partners and innovative technology companies, we have the power to advance the
life insurance transformation by radically simplifying the purchasing process
and significantly reducing the time from application to issue. We recently
entered into a strategic collaboration with Human API, a leading health data
platform, to offer a simple, digital way for consumers to share access to their
EHR in real time. Now an exchange that used to take days, possibly even weeks,
can happen in seconds. This is just one example of the way our industry can
build a simple and streamlined buying experience that puts consumers in control
of their personal information and their transactions.
A second positive trend we are seeing emerge
is that people are becoming more cognizant of their baseline health and how
that relates to their risks in a health emergency. Some of the earliest and
most consistent data related to COVID-19 spoke to an individual’s baseline
heath prior to infection and their ultimate outcome. Overwhelmingly, the healthier
someone was to begin with, the greater their chance of survival and the quicker their recovery. That trend is
amplified when it comes to people with pre-existing health conditions. For
example, emerging data shows that people living with diabetes with blood
glucose levels in a healthy range have a 1% fatality rate from COVID-19,
compared to an 11% fatality rate for those whose levels are outside a healthy
range.
This reaffirms our belief that life insurance
has a role to play in helping its customers live longer, healthier lives. Not
only do people want the protection a life insurance policy can offer, but they
want tools, resources and incentives to make small changes every day that can
have a lasting impact on their long-term health. We made that belief a
fundamental tenet of our business more than five years ago with the launch of
John Hancock Vitality. Last year, we took that commitment one step further
with John Hancock Aspire,
the first and only life insurance for people living with diabetes. John Hancock
Vitality and Aspire are the first steps, and though still young, the programs
are showing promising results. As of June 2020, 47% of John Hancock Vitality
members reported a drop in their BMI since they joined the program. We look
forward to finding new ways to provide consumers with life insurance solutions
that support their financial, physical and mental well-being, as well as
contribute to better overall health outcomes.
Lastly, COVID thrust us into a world where
telehealth went from emerging to mainstream. With the Centers for Disease Control touting
the benefits of telehealth services to curb the spread of COVID-19, states
scrambled to broaden their telehealth policies, even if only temporarily.
Suddenly everyone from the family pediatrician to an orthopedic surgeon was
just a virtual visit away. It makes sense in a pandemic and the recent
widespread adoption is likely an indicator that telehealth is not going to fade
with the virus. We were already engaged with partners who could offer our
Aspire customers virtual support, and we only see expanding that kind of access
to more customers as we build a modern toolkit of relevant resources.
There is no doubt that COVID-19 has changed
our world and our industry. It’s challenged all of us in ways we never thought
possible just a few months ago. Our resiliency will be defined by how we take
the lessons we’ve learned and turn them into new practices that create
meaningful change not just in how we do business, but how we position ourselves
in the greater health ecosystem. The opportunity is exciting but let us not
lose focus on what’s most important. Life insurance is not about policies sold;
it’s about people served — our existing customers and our
prospective customers. Let stories we’ve heard during this trying time motivate
us to create personalized, engaging solutions that can make a tangible impact
on our customers’ lives today, tomorrow and 80 years from now.
Another global survey by Deloitte of 200 CIOs found that 48 percent agreed that their companies did not have the technological capabilities to navigate the changing markets. This sentiment shows that technology investments are only expected to go up as companies begin to undergo insurance digital transformation and become more agile and scalable.
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