The Effects of COVID-19 on the Insurance Industry
Before we dive in, above all else, DUAL hopes you and your loved ones are well and safe.
During this unprecedented time regarding COVID-19, DUAL is committed to providing business as usual in unusual times; we’re keeping our employees safe by working remotely. But, it’s no secret every industry from hospitality to education, and yes, even insurance is going to take a massive hit from this deadly disease. Here’s what you need to know about COVID-19 and the insurance industry effects.
First Off, What is COVID-19?
Before we explore the insurance industry implications, it’s important to understand what the virus actually is to avoid misinformation. According to the World Health Organization, “Coronaviruses are a large family of viruses which may cause illness in animals or humans. In humans, several coronaviruses are known to cause respiratory infections ranging from the common cold to more severe diseases. The most recently discovered coronavirus causes coronavirus disease COVID-19.”
The deadly COVID-19 outbreak began in Wuhan, China in December 2019. According to WHO, those with pre-existing conditions such as high blood pressure, heart disease, diabetes, etc. appear to develop more serious symptoms of COVID-19 than others.
So, What Can You Do for Now?
- Follow your local government’s shelter in place policies and maintain social distancing.
- Wash your hands regularly and thoroughly with soap.
- Try to avoid touching your eyes and face (We know that’s easier said than done).
- Stay home if you feel ill.
- Consider donating blood in communities where it is needed and safe to do so.
- Donate to a local small business that’s struggling due to COVID-19 (Restaurants, theatres, etc.)
- And stay up to date on the news and virus hotspots.
There are many myths out there surrounding COVID-19 – check out the WHO’s MythBusters page to arm yourself with the facts!
COVID-19 Effects on the Insurance Industry
Now that we’re all the same page, there are many ways in which COVID-19 will impact our day-to-day lives in the insurance industry. Certain insurers ancillary to the hard-hit sectors will experience the most economic shift such as those who provide business interruption, loss of rents, travel, live event and other specialty lines of insurance.
How will BI coverage be hurt, you wonder? Most Business Interruption policies require direct physical damage for a loss to be covered, so the Coronavirus outbreak would be excluded from the majority of policies. After the 2003 outbreak of SARS, we saw this transition as many BI policies now exclude damages from communicable diseases. But, with all the economic distress it is unclear whether courts will step in and navigate the muddy waters of BI insurance during COVID-19. Any legislation forcing the hand of BI insurers to cover financial losses due to the COVID-19 outbreak would certainly be catastrophic for the industry.
It’s likely claims in those niche areas will rise as these insurers navigate the risks during this pandemic. Renewal books of business for insurers will be affected as many small businesses are expected to shut their doors permanently from the economic crisis at hand.
Working Remotely & Cyber Attacks on the Insurance Industry
So, your whole team is working from home in their pajamas? It seems like a great solution to these challenging times. However, hackers are leveraging the COVID-19 panic to target any industries that are transitioning to remote operations. The insurance industry will most definitely be targeted by these criminals amidst the adjustment period. Your whole team needs to be on the lookout for malware and phishing attempts using Coronavirus information as bait. Here are some helpful hints from the FTC on what to look out for regarding recent attacks.
Working and meeting remotely will also alter the industry “normal.” Technology and Insurtech have always been integral to our industry, but now virtual meetings, webinars, and digital assets are pivotal to survive this time.
At DUAL, we’re hosting virtual lunches to help introduce our new Transactional Risk team. This new group planned to be scheduling lunches with clients during this time, which is obviously no longer possible. While this was an easy swap, doing virtual meetings instead of lunches are missed opportunities for business. So, DUAL and their partners will be donating similar amounts of money we would have spent on lunch to local businesses/organizations in need due to COVID-19. Creative alternatives to standard lunches and meetings are expected to increase in the industry as we all traverse this challenging time.
At DUAL, we are closely and continually monitoring developments related to the pandemic. We will communicate with you as transparently and quickly as possible about any developments that may impact your and our day-to-day business operations with you. While the insurance industry will take a hit we believe through employee resiliency, creative business practices, and smart technology the insurance industry will weather the storm. Stay safe and healthy, everyone!