The pandemic has triggered calls to consider mandatory income protection (IP) insurance for disability and unemployment in some countries, research by Zurich and the University of Oxford says.

New ways of protecting people from the kind of economic distress caused by COVID may be found in mandatory schemes that provide support when hardship hits, the Shaping a Brighter Future of Work report says.

“People in every corner of the globe found themselves facing financial hardship and drained their savings, and, in some cases, retirement funds, as a way to stay afloat,” Zurich CEO EMEA and Bank Distribution Alison Martin said.

“Our findings highlight the demand for solutions that will make it easier for people to prepare for and make it through these kinds of crises.”

The research is based on interviews with Zurich senior leaders in 17 countries to gain insight into how the pandemic is shaping the agenda.

“Looking ahead, various types of insurance are likely to be in demand as the pandemic has revealed the importance of protection in the wake of shortfalls in public services and policies,” the report said.

Income protection insurance and term life coverage are expected to see heightened interest from people who were hurt by the financial impact of the pandemic or know someone who was, according to the research.

Interviewees noted the importance of educating people about their protection needs, which should have even greater resonance after COVID which crystallised the vulnerability of individuals and their families.

The prospect of compulsory protection is being raised in some countries, with discussions being held in Spain regarding a UK-style model of auto-enrolment into pension plans and the introduction of compulsory savings programs.

In the UK, there is discussion around making employer-funded sick pay compulsory, the report says.

“Auto-enrolment of employees in plans such as those that offer basic income protection and participation in pension schemes is recommended,” the report said. “Auto-enrollment has proven its worth and could be used more often in pension programs”.

“Mandatory coverages that help build and protect income are increasingly discussed.”