Navigating a new world of uncertainty caused by COVID-19
Thursday, March 19th, 2020
We are in the business of protecting our clients from uncertainty, and right now, there’s a great deal of that going around.
The global coronavirus pandemic threatens not only our health, as we’ve all seen in recent days. It now affects practically every aspect of our daily lives. Our jobs, our businesses, our children’s education, our politics, our ways of life, are all either threatened or already on hold.
Each day has been sharply different from the day before, in terms of whether we’re at work or at home, whether we can get products we need to safeguard ourselves or simply to eat, and we watch the wild swings in stock markets with morbid fascination.
And since no one on the planet has been in a situation like this before, no one knows exactly how things will develop going forward. But a lot of smart people in many different disciplines are working hard to figure it out, and the insurance industry is no exception.
Here are some of the most interesting trends, ideas and developments we’re seeing out there:
COVID-19 and business interruption
The coronavirus is causing huge disruptions and losses to businesses. The loss of income stemming from closures, supply chain disruptions and individuals’ curtailment of their ordinary activities will cause businesses of all sizes to seek insurance coverage through commercial property insurance.
Supply chain losses are likely to increase as the disease spreads in the U.S. and affects domestic customers and suppliers. Read more about this here.
Workers look to their employers for coronavirus news
Around the world, workers are turning to their employers for credible news about the coronavirus, creating a “considerable new responsibility for the corporate sector,” according to a survey on trust by public relations firm Edelman.
Fear of “fake news” and the politicization of the pandemic has caused many to turn to their bosses for reliable information.
“Given the present state of low trust, business will have to fill a further void, that of credible information,” CEO Richard Edelman wrote about the results. “It is urgent that we enable fact-based decisions and allow our employees to feel part of a broad societal movement to fight this plague.”
The survey found that employees believe coronavirus information from their employers more than from the government, health companies and traditional media. Read more here.
Telecommuting can lead to greater cyber insecurity
What was once known as a human resources perk at U.S. firms has now become a critical link in the business continuity and resiliency chain; the ability to work from home.
The “flight to telecommuting” on such a gigantic scale has raised many questions at firms of all sizes, especially those lacking the technical expertise and scale of Fortune 1000 entities.
Perhaps the most worrisome side effect of this sudden growth in the telecommuting workforce is the potential rise in cyber attacks, as hacker exploit the huge increase in softer, more vulnerable targets. Read more here.
Virus impact on workers’ comp limited, but some may be covered
The outbreak of coronavirus has already resulted in some workers’ compensation claims. More are expected. But whether those claims will succeed depends on individual circumstances, as well as the state where the infection occurred.
The landscape in this area is changing as governments react to the pandemic. For instance, at least two states have decided that they will guarantee workers’ compensation benefits for health care workers and first responders. Read more here.
What about effects on the insurance industry itself?
According to the Insurance Information Institute’s Global Macro and Insurance Outlook, 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 Q3 and beyond.
Based on feedback from executives at U.S. companies, the drag on global trade may be much deeper and wider than consensus from financial market participants. Read the report here.
Amid all the uncertainty, if you’re looking for answers to address your own concerns, contact one of our professional brokers here at South Risk Management. We’ll be glad to help you find answers.