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5 Things a Top Life Executive Is Seeing Now, Through the COVID-19 Haze

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Matt Berman is responsible for helping people get covered against the risk of premature death, at a time when COVID-19 appears to be increasing the risk of premature death.

Berman is the chief distribution officer of the Independent Order of Foresters. The Toronto-based company, which now does business under the Foresters Financial brand name, has been tightening its focus on selling life insurance.

(Related: Novel Coronavirus Disease and Life Insurance Underwriting)

Berman himself has a bachelor’s degree from the University of Pennsylvania and a master’s degree in business from New York University. He got his start in insurance as an underwriting director at American International Group Inc. For 10 years, before he joined Foresters, he held many different roles at AXA US, in areas such as competitive intelligence, life sales, and life product development.

Here are five things he’s seeing in the life insurance market now, based on written responses he provided through an e-mail interview.

1. Agents adapted quickly to the COVID-19-related shelter-in-place rules.

Berman says independent agents have shown a great deal of flexibility, and willingness to adopt new technology.

“Their resourcefulness and perseverance in pursuing credible leads, despite the challenging environment, has been admirable,” Berman said.

2. The impact of the shelter-in-place rules seems to be easing.

When the shelter-in-place rules took effect, in March, the drop in paper sales was sudden and steep, Berman said.

“However, as states and the broader economy have started to reopen, we’ve simultaneously seen a significant rebound in these sales,” Berman said.

3. What consumers want has changed, and what life insurers want to write has changed.

For life insurers, Berman said, the idea that interest rates might stay very low for a long time has put pressure on life insurance product prices, and especially on prices for products that support guarantees that will last for a long time.

For consumers, the COVID-19 crisis has increased consumers’ interest in term life, and other simple, inexpensive products that can provide a great deal of protection, Berman said.

Market volatility, meanwhile, has increased consumers’ interest in products shielded from market fluctuations, such as whole life, and decreased in interest in products linked to the stock market, Berman said.

4. The shift to digital-only, fluid-free underwriting is real.

Berman sees many life insurers accelerating the shift toward efforts to reduce use of paramedical exams, and increase the amount of coverage available to applicants who go without paramedical exams.

Life insurers are also trying to eliminate as many other paper-based and face-to-face components of the sales process as possible, as responsibly as possible, Berman said.

Foresters, for example, has enabled electronic signature tools and added support for independent distributors, to increase its ability to ‘fully function in this new reality,” Berman said.

5. The shift to fluid-free underwriting might affect underwriting results.

Some consumer groups, such as the Center for Economic Justice, have questioned whether the new, digital-only, “algorithmic” underwriting methods might be unfair.

Berman said in the email interview that, for carriers, one question is what increased use of fluid-free methods will do to claim costs.

The insurers expanding use of the new underwriting “are willing to assume the subsequent mortality slippage and, in turn, will look to reduce their operational expenses internally to neutralize or mitigate profit compression,” Berman said.

— Read Nassau Financial to Acquire Foresters’ U.S. Life Business, on ThinkAdvisor.

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