For sure last year has shifted consumer needs, habits, and expectations and thus has brought new challenges in the insurance world and changes in the demand for different insurance products. In the following, we have summarized a list of some of the trendiest insurance products during the COVID pandemic outbreak.

Home Assistance & Household Insurance

Pandemic and lockdowns gave us significantly more time to spend at home – privately and workwise. An estimated 50% of the workforce in developed countries has switched entirely to remote work during the pandemic and lockdowns. Microsoft Teams and Zoom are becoming the standard in organizing work meetings. Many people realized the importance of home comfort and invested in renovating or moving to a newer and more spacious accommodation. Moreover, as we spend more time at home, there has been a higher need and demand for home services, which usually insurance companies provide as add-ons along with household insurance contracts.

With the pandemic outbreak, it’s almost imperative to have proper cover for your belongings, property, and home and include an add-on emergency assistance service. A home assistance service provides an emergency electrician, sanitary assistance, a 24/7 call center, locksmith, plumber service, and emergency heaters in case there is an unexpected problem in the insured home.

Pet insurance

Pandemic times and lockdowns gave us also more time to spend with our beloved ones and with our pets. Besides being proven that pets help us relieve stress and positively influence our well-being and psyche, dogs can keep us active and dynamic in a pandemic time. Currently, breeders report to have experienced high demand from people to adopt or buy a pet whilst in lockdown. According to google trends, the search volumes for “buy a puppy dog” have increased with 170% during the pandemic. Respectively, this has also affected the demand for pet insurances. Besides the standard health and surgery costs of pet insurance, which covers the high expenses for medical treatment of cats and dogs, there is the liability risk that pet owners have to take responsibility for.

In Austria, small pets such as cats and hamsters are liability insured within the liability cover included in the household insurance contract. For dogs, there is a separate cover that has to be additionally signed – dog liability insurance, which depending on area is even obligatory by law. The regulations of the Austrian regions of Vienna, Lower and Upper Austria, Salzburg, Tirol, and Styria require that every dog owner has a liability policy for their dog with a minimum insured amount of 725.000 EUR.

The search volume for the keyword “buy a puppy dog” has increased by 170%.

Online providers of the necessary and vital dog liability insurance in the Dutch and German market and online price comparison website in Austria say they currently experience higher sales in that segments than before.

Cyber Protection Insurance

With the increased usage of the internet during the pandemic, we have also experienced a cyber criminality surge. According to experts in the field describe the events of the past 2020 year as a growing “cyber pandemic”. The accelerated digital transformation, the rapid shift to a home office, and increased usage of online services combined with the fear among people from the lockdown situation have opened broader opportunities to cyber-criminals.

One of the most common cyber-attacks known as phishing is a fraudulent practice of stealing individual data, such as access to credit card information and personal data, by massively sending fake websites and emails. Very often the fraudulent message can contain a bank’s actual logo and design informing falsely about available government funds during the Covid shutdown and prompting the victim to enter the account’s username and password. Then a message pops up informing that the data inserted was wrong, but indeed the bank credentials are saved in the hands of the criminals.

During the pandemic, experts estimate 4,000 new cyber attacks per day

In April of last year, a BBC report stated that Google alone was blocking 18 million coronavirus scam emails every day. Cyber experts say that there are on average 4.000 new cyber-attacks per day during the COVID pandemic.

Cybersecurity companies together with law enforcement report 800% surge in cyber criminality since the beginning of the lockdowns. With the enormous exposure to new cyber risk, cybersecurity protection has become vital for consumers. A cyber insurance for private households and individuals offers assistance in a case of stolen identity and payment information data as well as legal advice against misuse of data in the internet space.

Private Health Insurance

Undoubtedly, the aspect that changed most since the beginning of the pandemic events is the awareness about the importance of our health and those of our relatives. With tens of millions of infected people and more than 1,9 million fatalities worldwide the Covid-19 pandemic is the major global health crises of our time and the greatest challenge we have seen since World War Two. This has also had a huge impact on the capacities of our health systems and on the possibility of hospitals and doctors to deliver urgent and essential health care.

Governments and hospital associations worldwide claimed social health systems are challenged to even collapse with an outbreak of the virus. Limited access to medical treatment and shortage of medical stuff and doctors, however has a backlash on life and health also of non-Covid patients. Overloaded hospitals, shortage of intensive care beds, no access to medical advice means that the health and life of any patient that needs an urgent care might be even more at risk.

Private health insurance policy has become now more important than ever – it allows the insured to rely on an easier access to quality medical treatment, faster appointment with a private doctor, stationery stay at a priority category in a hospital with no additional financial burden involved. Irrespective of COVID medical exigencies are always unpredictable and a private insurance policy is always recommendable to have, especially in a country like Austria where we experience the so-called two-tier healthcare tendency.

Covid-19 pandemic is the major global health crises of our time.

In a two-tier healthcare system, there is basic medical care provided by the state and the second tier of care for privately insured who can get a faster appointment for inpatient and outpatient treatment. And this tendency became more tangible with the current outbreak of the virus as we experienced in Austria treatments, operations and appointments being cancelled or postponed because of an overloaded healthcare system. Numerous state-system doctors (in German Kassenärzte) had to close down their offices. Private doctors, on the other side were still available for their patients, private hospitals introduced special measures to avoid the cancellation of operations and medical procedures.

Additionally, insurers were quick to adapt their offers and develop new insurance products to specially cover cases related to Covid infection. Taiyo Life Insurance Company in Japan launched a new insurance product in 2020 that specifically covers hospitalization due to infectious diseases. More than 50,000 policies have been sold in the first 4 months of its launch. Rapid digital adoption driven by COVID-19 has also opened opportunities for new digital services in the outbreak of the pandemic. Insurance group UNIQA, the leading private health insurer in Austria, launched in May 2020 a telemedicine service. On the Lilo platform, customers can have a completely digital consultation on health issues with general practitioners and a team of paediatricians.

Term Life Insurance

Like with the concerns about health, many consumers, especially from younger generations, were confronted for the first time in their lives with the question of what would happen in a fatality situation. A lot of insurers claim to have doubled their sales of term life insurance policies during the pandemic compared to previous years. The fear of death and its financial consequences for the family has put greater awareness on the importance of investment in financial security and life insurance.

Lifenet – an online provider of life insurance products for the younger digitally-savvy generation in Japan, claims not only a higher number of life policies sold but also a 50% increase in new product releases sold in 2020 when compared to 2019. Affordable insurance products such as the standard term life insurance have been more attractive to younger consumers with the rising uncertainty during the Covid recession. Those insurers who were quick in expanding their online offers, digital consultations and online direct sales channels have marked an increase in their online conversion. Term life insurance requires information about the medical state of the client prior to signing the contract. However, insurance intermediaries together with insurers are increasingly looking for new opportunities to engage more health professionals to consult customers digitally in that process. This makes filling out the questionnaire about the medical condition through a call easier and possible, thus omitting the standard procedure of visiting a physical medical center or doctor.

Clearly, newcomers, online brokers and online insurance aggregators have experienced an advantage as being per default prepared to offer a fully digitalized service. What they have expected to reach from pure online channels in 3 to 4 years from now, they say, could be achieved now with the increased usage of internet by consumers. Cleary, the current pandemic situation proved to be a catalyst for transformation in the way consumers interact with insurance providers.

Insurance Sales During the Pandemic

There is generally a misconception among people who don’t work in the insurance industry that insurers must have had a peak now in their sales due to the increasing fears and concerns of the population over financial security and health issues.

However, on a global level insurers did not mark an increase in their incomes last year. As most other industries they suffer the aftermaths of a health and financial crises. What we have to bear in mind is that sales channels of incumbents especially in Europe are still predominantly comprising of independent intermediaries – small and medium enterprises as well as sole proprietorship intermediaries (brokers and agents) who suffered massive losses in their sales due to the pandemic. Many of those had to even close down completely their offices and businesses.

Insurers do not notice an increase in their sales during the pandemic outbreak

Most insurance policies, especially personal lines, are comprehensive investment products that require a personal consultation with an expert. With the outbreak of the pandemic and reduced personal contacts insurers experience a plunge in sales in both personal and property-casualty lines. Less driving and less car registrations has also resulted in a drop in premium volumes which from the other side is offset by improved profitability with expected drop in accidents.

However, major insurers in Austria and in other European countries managed to maintain their results at the level as in the pre-pandemic year. During an offset of one of the biggest pandemic crises humanity has ever faced, this leads to the confirmation that insurance remains a vital and social tool for reducing and eliminating the risk of loss to people’s lives and properties.

Many thanks to friends from Lifenet, Merkur, a Dutch pet insurer, price comparison