As more advisors and consumers turn to online and virtual settings to offer and receive advice, they’re accelerating the insurance industry’s digitization, according to the CEO of digital insurance platform Covr.
Within 12 months, advisors and consumers on Covr’s platforms using fully digital journeys for insurance increased from 10% of sales to now 62% of sales.
“Our sales through financial advisors at Covr are 59% higher than last year,” said Mike Kalen, Covr’s founder and CEO. “Sales in our direct-to-consumer channel are up by 270%. Both those channels have been positively affected by consumer attitudes towards life insurance during the pandemic.
Covr is an insuretech platform enabling advisors, banks and other institutions to sell life and long-term care insurance to clients. Kalen, formerly president of U.S. individual life for The Hartford, joined the firm in 2018 after recognizing the need for a digital insurance provider capable of serving multiple channels in the financial services industry.
Advisors should assure their clients that not only is it still possible to purchase insurance amid the Covid-19 crisis, but also that it’s easier now than ever in several ways, said Kalen. For example, most insurers are waiving exams and required medical documents for many policies, with fully one-third of policies being done with no medical exams, and over 10% of policies additionally waiving medical requirements to save time and money.
The face amount of a policy that can be underwritten without a medical exam has nearly doubled and is now up to $3 million per individual, said Kalen, because insurers are now using big data to underwrite clients.
Technology has also made it easier than ever to offer and sell insurance completely online, with no face-to-face contact.
“The basic needs like term life insurance and asset-based long-term care, they can initiate the request for insurance in 20 minutes and through Docusign, electronic payments and electronic delivery, the rest happens digitally,” said Kalen. “There are more complicated cases, and for those we do offer consultation for underwriting solutions.”
Part of the increase in activity on Covr’s platforms represents growth in long-term care insurance sales – both premium- and asset-based long-term care options are available on its platform, but are only offered via advisors as they are “too complicated” for the direct-to-consumer channel, said Kalen.
“Life insurance sold on the platform is up 50%, but long-term care is up 90% for Covr year-to-date,” said Kalen. “A big part of the increase is the growth of asset-based (or hybrid) long-term care. We feel that customers are conserving capital, even if they haven’t had their business or job status affected, and they’re now very aware that there are gaps in their protection planning. They want to hear about products that can fill those gaps right now. The advisors on their front foot and asking the right questions are doing a lot of business right now. ”
Over the past three months alone, Covr has witnessed a four-fold increase in life insurance applications via its direct-to-consumer platform, said Kalen which may be a sign that advisors are underinsuring their clients.