Broker Check

How Insurance Could Change After COVID-19

June 17, 2020
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A recent post on CRWE World "What Should Insurers Focus on Post-COVID-19?" while superficial and lacking specifics did provide food for thought on what insurers should learn from this pandemic. 

COVID-19 has affected the insurance industry as it has everything else. Health and Workers Compensation claims are rising, in the latter case due in part to presumptions that illnesses of essential workers are workplace-related. General Liability claims may increase as businesses reopen. Business interruption claim denials have resulted in suits and calls for legislative intervention, with pushback from insurers.

What do insurers need to do? They must pay legitimate claims but should not be expected to pay claims excluded by policies. Going forward they need to make policies easier to understand - which is not the same as making them easy to read. Terms like "all risk" and "comprehensive" can mislead insureds into believing policies are broader than they are. A quick guide to what is and is not covered, written in plain English (translations on request) should accompany all policies.

Other things insurers can do:

  • Coordinate with governments on how to cover events such as pandemics.  
  • Improve their technology and data collection.
  • Innovative insurance policies addressing the "new normal" to cover work from home, use of private cars for deliveries, etc.
  • More focus on getting policyholders to manage risk rather than relying on insurance to pay all losses.