The Effect Of Covid-19 On The Global Insurance Sector
On the 17th of November 2019, the first-ever known case of the new virus that would soon gain universal notoriety as Covid-19 was registered in China. Only 2 months later, there were almost 10,000 known cases worldwide.
By the end of Feb 2020, the virus had globally affected more than 85,000 people – a jaw-dropping 769% explosion in numbers from just a month before.
On 11th Mar 2020, the World Health Organisation declared the virus as a pandemic. To date, more than 4,00,000 cases have been detected worldwide.
Quarantine & Social Distancing
China, Denmark, Spain, El Salvador, Poland, France, New Zealand, India, Italy & Ireland have implemented the most comprehensive nationwide quarantines in the wake of this global pandemic.
Some of the most iconic institutions & national heritage sites in the USA – The Smithsonian Institution, Disneyland, Disneyworld and the Arlington National Cemetery have all closed doors.
These draconian quarantine & social distancing measures are not without reason. Similar restrictions, especially in the global epicentre of Wuhan, China where the virus was first detected, has yielded positive results.
On 10th Mar 2020, China closed down the last of its makeshift hospitals in the region, heralding the triumph of caution & vigilance in the face of a global emergency.
Lloyd’s Of London Shutters
On the 13th of Mar 2020, Lloyd’s of London conducted a resilience test to gauge the feasibility of a shutdown. After its success, it permanently shut down its underwriting room on 19th Mar – a first in its long 330-year history. In keeping with the present best practices of most other iconic institutions, Lloyd’s moved almost all of its insurers to remote working – a policy that, here onwards, will be closely monitored & reviewed every week. For initial days, Lloyd’s building at One Lime Street will stay open for tenants. This, also, is subject to any developments in the immediate future.
Insurance Industry & Pandemics
Traditionally, companies had been averse to pay business interruption insurance in the wake of a sudden spread of diseases. However, insurance companies usually gave in during pandemics, primarily because they were few and far between.
The SARS & the Ebola epidemics were painful lessons for global businesses & insurers alike. In their aftermath, the insurance industry was forced to re-evaluate its policies & business models.
In the wake of the SARS epidemic, the Insurance industry had to brace a global exposure from Employment Practices Liability or EPL. This was especially pronounced in the case of employees in the healthcare industry.
Similarly, during the Ebola outbreak, insurers experienced maximum exposure from the Workers’ Compensation vertical. The other liabilities involved General Liability, Medical Malpractice & Directors & Officers (D&O) liability.
Unfortunately, the effect of the Coronavirus is unprecedented. It has stretched & bent the industry in a manner unforeseen even in their riskiest simulations.
A number of Insurance experts have expressed concerns over data security. With increased dependency on remote-working & work-from-home provisions, security & safeguard of sensitive information have become paramount importance. The risk of the information falling into the wrong hands has increased dramatically.
The Insurance Information Institute (a Deloitte study), in its first-quarter “Global macro outlook,” reported that “COVID-19’s impact on global growth and the insurance industry is likely deeper and wider than the current consensus and could last well into the third quarter and beyond.”
What Can Be Done?
A new line of product
- Since 2018, Marsh, a US Based Insurance broker has been providing cover for infectious diseases through a product called Pathogen RX. The company expects to earn annual premiums of up to 1.5 billion USD from this offering alone.
- Collaborate with Health providers
- like Behold.ai are at the forefront as they have developed an algorithm that can speed up the diagnosis of COVID-19 patients using more than 30,000 example scans.
Integrate with data-driven organizations
- Metabiota maintains a vast database on emerging & historic outbreaks. Incorporating environmental, political & social factors, in create models & make predictions. This can help insurance providers make informed decisions and prepare for some.
At INT while working closely with our insurance providers we have ensured best practices while moving to remote-work. Here is our journey.
- AI & MI
- Big Data
- Buy Hours
- Data Analytics
- Data Security
- Dedicated Hiring
- Digital Buzz
- Digital Payment
- Enterprise Mobility
- Flexi Hiring Solutions
- Flexible Operation
- Hire Experts
- Home Automation
- Hybrid Work
- Industry News
- Inside Indus Net
- Marketing Automation
- Mobile App
- Mobile Game
- Modern Lifestyle
- MSME Industry
- MSME News
- News @ Indus Net
- Remote Work
- Social Media
- Time Management