Covid-19 changes discussions with clients

Jon-Paul Hale says as we learn more about Covid-19 advisers need to be asking more questions from their clients.

Sunday, October 25th 2020, 10:00AM

We have all seen the progress of Covid-19 across the world, and here in New Zealand, we have been relatively isolated from the majority of the effects. So much so that people really don’t know what it is first hand, yet.

Time may change that, while we’re safely behind a closed border that may not be the case in the future.

Also, if you’ve done any insurance work in the last few months, you will have seen some of the impact from his with extra questions being asked and extra forms from insurers.

That’s now, what about the future?

One thing I have been watching with the relentless progress of this across the globe has been the noise on recovery, or more the point lack of recovery.

No, I’m not talking about deaths. I’m talking about the impacts of impairments that have been identified from Covid-19.

When people have been saying it’s not the flu, most have looked at it on the basis of deaths. Also, unlike the flu, which most people recover from without complications, Covid-19 impacts peoples health and system in ways we never anticipated.

We know about the lungs bit, but that’s proving to be just the tip of the iceberg. Unlucky if that was you, but lung transplants are the minority of cases by a long margin.

What is showing up is the impact on other organs and systems of the body. We now know internally this is a blood-borne disease with effects on haemoglobin, that also has impacts on all organs as a result.

One doctor in the United States has told a contact of mine the impact they have experienced has been from the low oxygen levels they experienced while fighting off Covid-19. This is someone that didn’t end up in the hospital. So I have this first hand, not through a friend of a friend’s uncle's second cousin.

This impact is starting to show up in news stories, initially with China, and then with articles out of Europe, UK, and the United States. We now have it appearing in Australia with the recent article in the NZ Herald talking about the impacts here.

What this is saying is 1 in 6 people that get Covid-19 have some level of ongoing impairment that they are not recovering from. And many mild cases won’t know about this unless they are specifically tested to quantify it.

As an insurance adviser, this puts me in an interesting position as there is a high likelihood that my client, who has had Covid-19, has impairments that they don’t know about.

It also raises the issue in very mild cases where they may not have a confirmed diagnosis either. Possibly here in New Zealand now, but more so something we will have to contend with in the future.

So what do we need to be looking out for?

Firstly that someone has had Covid. It needs to be part of our needs analysis questions going forward before the application.

The next bit is we need to be aware of the impacts that people could have.

From what I have seen to date, this is primarily in the following areas:

Heart
Kidneys
Liver
Lungs
Cognitive
And Neurological
With Thyroid added to the list as a late entry.

Yes, cognitive and neurological. Memory issues, fatigue, fog, thought and thinking processes, as well as the run on mental health effects of depression and anxiety.

And in some reported cases PTSD effects are also being demonstrated.

As an adviser, this creates a situation where we need to tread carefully, especially when it comes to replacing cover.

We need to be diligent in identifying risk for the clients, both with their present situation as well as with their current cover.

I fully expect insurers to be working on understanding this long term situation and impact, and I hope this will result in more overt questions on Covid-19 in application forms as things progress for us to deal with.

I like to be ahead of the curve on change, I don’t like it surprising me, and I want to have the time to make adjustments, so clients have a minimum of impact.

Which means going forward a few questions are being added to what I do:

Have you had Covid-19 or been exposed to it?
Have you or your job had any financial impact from Covid-19?
And what travel plans do you have, nationally and internationally?
Given the challenges of public transport Covid-19 transmission, that probably needs to be asked too.

Getting a bit OTT, potentially, at the same time, part of the approach to risk management is knowing how insurers will respond to the risks. And that needs pre-underwriting to ensure you minimise how many applications you have to do to get your client coverage.

As too, the insurers have a cost to bear for every application submitted that doesn’t proceed.

I’ve seen advisers in the past get applications completed for five-six insurers at the first appointment, so they have the underwriting done to finalise things when they do their report.

Incredibly inefficient when a good portion of them don’t proceed, this is an increased cost to the whole industry by these advisers, and we see that with the increases in premiums.

And sure I have plenty of cases that don’t proceed, mostly replacement as the underwriting produces surprises from medical notes or terms that are worse than the existing cover.

But I also know 60% of the people I talk to result in paid new business too. It may not have come from the first application, but it will come from the service work I do as a reality of looking after that client.

Tags: Covid-19