Canadian Group Benefits - COVID-19 Pulse Survey May 2020 - NMG Consulting
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Canadian Group Benefits
COVID-19 Pulse Survey
May 2020
Insurance | Reinsurance | Wealth Management | Asset Management
Copyright 2020, NMG Consulting. All rights reserved
NMG Consulting COVID-19 pulse study overview
NMG Consulting Overview Market Observations
▪ NMG Consulting is a leading multinational insurance, ▪ More than one-quarter of group intermediaries are
reinsurance and asset management consultancy extremely concerned about the impact of the virus on the
▪ We provide strategy consulting, as well as insights services industry
to financial institutions globally
▪ The main concern is declining revenue streams due to
▪ NMG’s evidence-based consulting programs carry-out
lay-offs and cancellations
interviews with industry experts to analyze industry trends,
competitive positioning and capabilities ▪ Significant decline in new business activity as in-force
management becomes the strategic priority for
intermediaries
Study Overview ▪ There has been a substantial decrease in quote
submissions on existing plans and consequently switching
▪ NMG Consulting implemented a pulse survey with
of plans
intermediaries focused on the Canadian group benefits
industry to gather insights on how the market is reacting ▪ Insurers have mostly exceeded expectations in terms of
▪ ~70 respondents participated during the period: April 23rd providing support through this crisis. The main areas of
to May 4th, 2020 support include proactive and transparent
communication, responsiveness, flexibility in approach
and premium relief
Objectives of the Report ▪ Intermediaries expect some of the changes to last beyond
Sharing back with Insights Partners: this crisis given they have adapted to the new working
▪ Top-of-mind concerns environment. These include utilizing the available
▪ Changes and impacts to business activities
technology, adopting virtual meetings for client
▪ How and which insurers are standing out
engagement, and increased adoption of telemedicine
services
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For further inquiries, please contact Hamish Worsley (Hamish.Worsley@NMG-Group.com) or Karan Sabharwal (Karan.Sabharwal@NMG-Group.com)Layoff related revenue dips are a primary concern for
intermediaries
Level of concern with the impact of COVID-19 Thoughts on the impact to your business and the market
19%
51%
28%
• Most intermediaries in the Canadian group “We are experiencing terminations and lay-offs like we have never
insurance market have some level of concern seen before. I worry about restarting the economy and how this will
• More than one quarter of respondents state that draw down revenues, it could take a while.” - Western Canada
they are extremely concerned about the long-term
economic and revenue stream impacts “Premium reduction. Closure of organizations. Increased demand for
• The level of concern is least among those focused virtual care. Reduced risk-taking by insurers and increased costs
on the large case market related to disability.” - Quebec
Legend: Not at all concerned Slightly concerned Moderately concerned Extremely concerned
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Question: How would you rate your level of concern associated with the coronavirus, market volatility, and its impact on the advice industry?Concerns around affordability and revenue dips are top-of-mind
across intermediaries
Level of concern with the following outcomes • Intermediaries are most concerned about the
impact COVID-19 is having on their clients which
will in-turn impact layoffs, affordability,
Unemployment
reducing client 18% 50% 30% intermediary revenue and growth prospects
employee numbers
Renewal issues “More worried about “I think this will be
related to 20% 48% 30%
clients. I expect a temporary, but lead to
affordability
significant decrease changes in how
Group insurance
practice revenue will 28% 47% 20% in revenue. Clients organizations construct
decrease significantly reviewing options.” and offer benefits going
- Ontario forward.” - Atlantic
Difficulty in sourcing
27% 40% 23%
new clients
“In the short term, the impact has been primarily
Effects on my around providing increased support for our clients, and
business (reducing 50% 27% 3%
helping them manage the daily changes that arise.
staff, working ways)
Delays in completion Longer term, we expect a negative impact of
of renewal 42% 28% 3% approximately 20% group benefits revenue as firms will
applications operate with less staff and the economy will likely take
years to recover.” - Western Canada
I will lose clients to
40% 12% 2%
another adviser
“We have had to think outside of the box to provide our
Lack of resources to
2% clients with immediate savings as a direct result of
manage clients 32%
13% COVID-19.” - Ontario
during this period
Legend: Slightly concerned Moderately concerned Extremely concerned
4
Question: How concerned are you about the following outcomes?Intermediaries are focusing on client communication and
education; new business development opportunities decline
How has COVID-19 impacted the frequency/volume of certain • Ongoing client communication and
activities within your practice education/information is a main priority for
no intermediaries during this volatile period
change • While business development opportunities have
taken a hit, intermediaries are investing that time to
Outgoing client 2% 7% 27% 65% better service their existing clients
communications
• The current environment has provided
intermediaries with a unique opportunity to build
Client consultation 10% 5% 38% 43%
and education 3% stronger relationships with clients, possibly
benefitting them in the longer term
Outreach to 8% 20% 33% 38%
insurance providers “Ensuring clients are up to date and feel supported.
Setting the groundwork internally for business
Inbound client calls 13% 10% 27% 43% development and opportunities as the industry
& emails 7% emerges from this.” - Ontario
Marketing 17% 17% 22% 30% 15% “Ensuring consistent and increased contact with clients
campaigns to provide assistance. Seeking opportunities to assist
those who are orphaned.” - Western Canada
Traditional 58% 17% 10% 13%
networking activities 2%
“Ensure clients “Serve our customers well,
are well informed given the current context.
Sourcing new clients 57% 23% 13% 5%
2% of their options.” Assist clients to avoid
- Western Canada layoffs.” - Quebec
Legend: Significant decrease Some decrease Some increase Significant increase
1.’no change’ citations are displayed down the middle of the bar chart
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Question: How has COVID-19 impacted the frequency/volume of the following activities within your practice in the last three to four weeks?Significant decline in new business activity makes in-force
management a strategic priority
Impact on the following activities as a result of COVID-19
no • Regarding business development, the number of
change
new clients placed has reduced significantly across
Brokers 42% 29% 17% intermediaries
Number of new
clients that • Brokers are seeing the largest decrease in the
were previously Consultants 38% 23% 38% proportion of plans going to market (quoted) and
uninsured that
you have placed fewer plans switching insurers as a result
TPAs 56% 33% 11%
• With the reduction of new business opportunities, it
Brokers 42% 25% 13% is very important for intermediaries to focus on in-
Number of new
clients that force management a strategic priority
were previously Consultants 54% 15% 31%
insured that you
have placed
TPAs 22% 44% 33%
“The main priority is to maintain what we have with
Brokers 25% 33% 38%
Proportion of our current clients, even though the revenue per client
your plans going Consultants 38% is decreasing. We are also looking at setting up
to market 15% 15%
(quoted) marketing strategies for new client acquisition going
TPAs 56% 22% 22% forward.” - Western Canada
Of those going Brokers 29% 17% 42%
to market,
proportion of “Working harder to reassure and retain clients as many
these plans that Consultants 62% 23% 8%
have switched businesses adjust and determine how they can operate
insurers TPAs 56% 22% 22% differently, do more with less.” - Ontario
Legend: Some decrease Significant decrease
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Question: How have the following activities been impacted as a result of COVID-19?Insures have responded well with proactive and open lines of
communication along with flexibility around premium holidays
How have insurers worked with you across these support areas • Insurers have mostly performed above expectations
in supporting intermediaries through this crisis
• Insurers that are recognized for their strong support
Communication on have focused on various strategies including
their approach and 46% 7%
proactive and transparent communication,
outlook
responsiveness, flexibility in approach and premium
Proactive relief
41% 9%
communication • Sun Life and Canada Life have excelled in supporting
their intermediaries, while Manulife is perceived to
Responsiveness to
37% 5% underperform
you, the adviser
• Insures which have struggled to differentiate
Sharing relevant themselves during this crisis have been very
insights/perspectives 36% 5%
reactive in their communication and slow to
during this volatility
respond to client needs
Flexibility around
32% 8%
premium holidays “Some have been extremely flexible around both
Responsiveness to disability benefits and the continuation of benefits.”
your clients, the 31% 9% - Western Canada
employer
Flexibility and “Being proactive “Strong and timely
support around the 34% 3% and responsive communication really stands
claims process
in delaying out. Good communication on
Support and
renewals.” the outlook post COVID-19.”
guidance to help you 27% 7%
solve problems - Atlantic - Ontario
Legend: Above expectations Excellent
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Question: Thinking about the insurers that you work with, how well have they responded to the situation in each of these areas of support?You can also read
