While there have been many major events across the decades, there has never been a year like 2020 – with a major bushfire season, storm events and now a global pandemic.
The buzz word of 2020 is unprecedented, yet this sentiment holds true. This year every business has been racing to adapt to the latest restrictions and what is now considered ‘the new normal’. More importantly, 2020 has tested every business continuity plan to be proven true or false.
The impact of COVID-19 on the insurance industry
The long-term impacts of COVID-19 on the insurance industry are too early to call, however short-term, the pandemic could have a flow-on effect to capital availability. The collective reduction of an organization’s financial assets – fuelled by weakening economies – could lead to a hardening of insurance premiums and coverage. Even pre-pandemic, Gallagher Bassett was seeing insurance markets ‘harden’ in any case.
Prior to the pandemic, many in the finance sector were already forecasting the market was hardening, resulting in higher insurance premiums and more restrictive coverage for most buyers. This has been contributed by a combination of social factors, such as the increasing likelihood of people lodging claims and costly catastrophic events. The pandemic is likely to accelerate this trend.
But there are silver linings for the insurance industry and employment opportunities the sector affords jobseekers or those individuals looking for a change post-pandemic. Thanks to the resilient nature of the insurance industry, Gallagher Bassett anticipates the sector will attract new talent at junior levels who may have lost their job during COVID-19.
What’s next for the insurance industry?
The biggest lesson out of the pandemic for business is that every employer should engage a broker and an carrier. Maintain healthy housekeeping, understand your business and partner with a reliable broker and carrier to make it happen.
Learn from the success or downfalls of your organization’s continuity plan and revisit your insurance coverage if your policy failed to provide adequate coverage through the pandemic. Your broker plays a crucial role in clearing up ambiguity in wording and can advize your business on the gaps where additional limits and offerings may need to be obtained.
The right cover is the oil that gets the economic wheel turning for your business and employees, should the events of 2020 occur again in the future.
Post-pandemic, insurance remains an industry to watch. As business returns to work and the economy starts to rebuild around the globe, the one thing that will always be constant and required is insurance.
Check out our three expected key trends for Carriers going into 2021.
For more great insights, whitepapers and case studies, visit our Insurance Carrier Resource Centre.
To find out more about how Gallagher Bassett partners with insurers to deliver custom claims solutions that support your business contact us today.