High net worth investors have resorted to panic buying life insurance products as a result of the COVID-19 pandemic despite low trust in the providers. Survey revealed 88% of wealth managers reported heightened demand for life insurance products which was the highest among the 19 countries surveyed.83% of Australians were quite or extremely concerned about the outbreak of the pandemic, with only 5% who were not concerned. Panic buying does not end with food. In the face of growing concerns surrounding infections, Australian investors are looking for ways to care for their families.
Despite the panic buying, 96% of wealth managers agree that customers have lost confidence in the life insurance industry as a result of the COVID-19 pandemic.
The reputation of insurers has taken a battering amidst COVID-19 and HNW investors will be more likely to buy insurance products via a third party they already have a well-established relationship and trust. This means now is clearly the time for wealth managers to review their life insurance proposition.
In addition, 61.5% of Australian believed that the COVID-19 situation will get 'a bit' or 'a lot worse' over the next month. This compares to only 28.7%, who expected the situation to deteriorate at the beginning of May.
Negative sentiment will continue to support the demand for life insurance products with nearly half of wealth managers surveyed expect an increase and almost none expect demand to fall. However, the lack of trust in insurance providers continues to have a significant effect on the provider selection. The crisis has been a double-edged sword - COVID-19 is driving demand but has also had a negative impact on the insurance providers' image.
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