It’s not provocative to say that 2020 has been a strange year, and that extends to every line of business in insurance.
As witness to over 1 billion online comparison shopping events for major-life purchases — of products like insurance and consumer finance products — every quarter, Jornaya acts as a proverbial front-row seat for trends in the consumer buying journey as they develop.
(Related: My Life Insurance Buying Journey)
Here’s what has happened in 2020 across insurance.
- Auto: Consumers were more budget-conscious and drove less, which flooded the auto insurance market with shopping activity. This marked 2020 one of the largest land-grab opportunities in recent memory for auto insurers.
- Home: With mortgage rates at historic lows, consumers fleeing cities for suburbs, and the interdependent shopping activity in auto, home insurance shopping also skyrocketed.
- Health: Shopping topped Open Enrollment Period levels throughout the year, with record unemployment and concerns about adequate plan coverage being large drivers for the activity. This was coupled with a drop in visits to the doctors. Profitability was OK in health this year — although it remains to be seen what ramifications will come in ensuing years as a result of reduced use of care.
So, what happened in life insurance this year?
The Pandemic and Life Insurance
COVID-19 fears at the beginning of the pandemic piqued consumer interest in life insurance products above normal levels, extending the busy season.
But along with that increase in interest came challenges.
Fed rate cuts decreased return on carrier investment assets. Medical exams became more difficult to complete for fully underwritten products.
So, while demand for life insurance was high, achieving profitability was tough.
Carriers narrowed their product suites and lowered face amounts. Some products experienced rate changes.
Delays and restrictions eventually led to mid-funnel breakage, and consumer shopping for life insurance dropped in mid-April almost as quickly as it rose in February.
At Jornaya, life insurance was the only line of business in insurance that experienced year-over-year decreases in shopping activity this summer. And it certainly doesn’t help that life insurance isn’t a required policy. It is often the first to evaporate from the consideration set when consumers are tightening their wallets.
But There’s Good News…
The life insurance market is stabilizing, with consumers making life insurance a priority. Life Happens cited life insurance coverage dominated dinner discussion in 30% of households surveyed. Jornaya saw shopping levels go up in September (6%), October (8%), and November (15%) when compared with shopping levels for the same months in 2019.
The MIB Life Index reported a 7.6% increase in insurance applications in October, the largest year-over-year increase in nine years.