A global pandemic that no-one saw coming, COVID-19 is impacting all types of industries, including insurance. Yet the fast-evolving nature of the virus means each day is never the same, and its long-term impact, remains unpredictable. There has been a good deal of negativity surrounding the insurance sector in the press, but have previous outbreaks like SARS and Ebola provided lessons to help the industry cope with such extreme events? We take a look at some of the more positive news about how the industry is supporting its customers.
Customers come first
With most of the industry working remotely, having the right digital capabilities in place means people can operate and communicate via video teleconferencing, for instance, to ensure customers remain a key focus. While meetings are no longer face-to-face, communication is paramount to keeping contact and relationships flowing. In the Lloyd’s market, the importance of continuing to serve the customer has been highlighted, with it announcing that “we have been working on how we can help reduce the reporting requirements on managing agents, to support efforts on serving customers through COVID-19.”
Opportunity to step up
In a video cast series published for Insurance Post and Insurance Age, Kelly-Ann Knight, Chief of staff at independent insurance broker Ardonagh Group noted that as an insurance broker it is their responsibility to help others, whether that is to help with claims or help understand what policies may or may not do. She notes that at a time of crisis they have to “step up” within their communities and rise up in terms of what they would usually do in their day to day job.
Without a doubt, there are and will be lots of claims being made, most notably within classes such as health and life insurance, income protection insurance, travel insurance, event cancellation insurance and so forth. Paying out on these policies will be a burden on the industry, as the lockdown continues and death rates rise. According to an analysis by global credit ratings agency, Fitch Ratings, as it currently stands, “the life sector [has a] negative rating outlook because life insurers have much higher asset leverage than other insurance sectors, and thus, asset shocks will be felt harder relative to capital”. However, the firm makes the point that those with enough capital should be able to absorb any losses.
Resilience and agility
Resilience and agility will be key to those who survive the crisis. As reported in an article by Insurance Day on 25th March, credit rating agency AM Best believes that “the insurance industry is more resilient today to financial market downturns than it was during the 2008/9 financial crisis, which raised the focus on liquidity risk. As this time, rated companies are expected to meet their commitments, despite the rapidly evolving situation.”
And as for us
While the pandemic presents enormous challenges of all kinds – to health and business – and we all proceed with caution, we are experiencing a great deal of positivity from clients who are continuing to invest in the technology they recognise they will need once some sort of normality resumes. Even before lockdown the VIPR team was set-up to work from different locations and remain fully flexible, so we can continue to provide services to our business partners. As a progressive technology company, we have long had the necessary infrastructure and processes in place to be able to meet digitally with clients and prospective customers and continue to support them.