Uncertainty seems to have become a common theme in recent times, first with Brexit and now COVID-19. As the impact of COVID-19 on the economy gradually begins to become clear, sectors such as insurance are shifting in terms of responses on an almost daily basis. We are looking, in brief, at how some of the big names in the industry have been finding solutions to the various issues that COVID-19 currently presents.
A shut down on the travel insurance industry
According to Which? almost half of the UK’s travel insurers have now stopped selling policies to consumers. 31 of the 75 leading insurers, such as Churchill and Aviva, are no longer offering travel insurance and another 13 companies have changed the terms of their policies to ensure that COVID-19 is excluded. According to the Association of British Insurers, insurers are set to pay out at least £275 million in coronavirus related claims this year.
Motor insurance looks set to offer refunds
Given that most of the country is in lockdown, car insurance is currently pretty redundant. Admiral has become the first insurer to take this into account and start offering its customers a £25 partial refund to reflect the situation that many now find themselves in. Admiral is Britain’s biggest car insurer and the £110 million payout will cover around 4.4 million vehicles. It’s thought that other insurers will follow this example. Consumers don’t have to do anything to receive the goodwill refund as it will be automatically credited to accounts by the end of May. The move has been positively received with many reflecting on the fact that consumers will remember how they were treated by businesses during the current crisis.
The row over coronavirus payouts may end in legal action
At the centre of the row is Hiscox, which has angered businesses with the position it has taken over coronavirus payouts. At the heart of the issue is the fact that Hiscox “core small commercial package policies” do not provide cover for business interruption that has resulted from government mandated actions responding to the COVID-19 crisis. Customers who are affected have now raised the threat of legal action and Hiscox has said it will work to reach agreement that involves regulators and the wider industry.
Operational change is driving insurance brokers towards greater integration of tech
One of the silver linings of the COVID-19 crisis is that technology could be much more broadly integrated across the industry. There are many advantages to working with more technology and automation, especially when it comes to improving operational efficiency and dealing with the short-term cash flow hit that many in the industry face. From keeping clients and teams together to improving customer and claims management there are many ways in which technology can help to keep insurance brokers afloat now – and even help lay the foundations for greater efficiency and service in the future.
The insurance industry is coping with the impact of COVID-19 in a variety of different ways and this is likely to continue to change in the coming days and weeks.