Toilet paper was not the only commodity subject to COVID-19 panic buying, life insurance has been similarly affected, according to new analysis from GlobalData.
According to GlobalData, a recent survey showed that demand for life insurance products rose among Australian high net worths to be the highest in 19 countries surveyed.
GlobalData senior wealth management analyst, Heike van den Hoevel said that it appeared that panic buying did not end with food, with Australian high net worths (HNWs) appearing to be looking to find a way of caring for their families in the event they became infected.
Data from GlobalData’s COVID-19 Tracker Survey showed that 83% of Australians were ‘quite concerned’ or ‘extremely concerned’ about the outbreak of COVID-19, as of 5 August, while another 12.1% were ‘slightly concerned’, leaving a mere 5% who voiced no concerns.
“In addition, 61.5% of Australian believed that the COVID-19 situation will get ‘a bit’ or ‘a lot worse’ over the next month,” it said. “This compares to only 28.7%, who expected the situation to deteriorate at the beginning of May.”
“This negative sentiment will continue to support the demand for life insurance products,” van den Hoevel said.
“Roughly half of the wealth managers GlobalData surveyed expect demand to continue to rise over the coming year while virtually none expected 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.”
According to GlobalData’s proprietary data, 96% of wealth managers agreed that customers have lost confidence in the life insurance industry as a result of the COVID-19 pandemic.
“This is a worrying statistic – 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 reputation with and trust. This means now is clearly the time for wealth managers to review their life insurance proposition,” van den Hoevel said.