COVID-19 has accelerated change in insurance claims
A new report by Allianz Global Corporate & Specialty (AGCS) explores the unique market conditions that have resulted from the COVID-19 pandemic
A new report by Allianz Global Corporate & Specialty (AGCS) explores the unique market conditions that have resulted from the COVID-19 pandemic
A new report by Allianz Global Corporate & Specialty (AGCS) explores the unique market conditions that have resulted from the COVID-19 pandemic.
Specifically, the company details how latent changes in both society and the insurance industry have been accelerated, and how the new business paradigm will continue to shape claims trends.
The pandemic’s effect on commercial and specialty insurance has been significant, as Thomas Sepp, Chief Claims Officer at AGCS, relates from the company’s own perspective:
“The pandemic is certainly one of the worst loss events for the insurance industry in history; claims could be as high as US$110bn in 2020, according to Lloyd’s estimates.
“AGCS alone has reserved about €488mn (US$571mn) for expected COVID-19-related claims, especially for the cancellation of live events and the disruption of movie or film productions in the entertainment industry.”
Changing industry patterns
However, Sepp notes, the immediate financial repercussions of coronavirus, though severe, are not as existentially threatening as the unanticipated shift in insurance industry patterns.
While some forms of risk have experienced a reduction owing to lower overall activity levels, other areas have grown significantly. Sepp postulates that the ‘new normal’, in combination with other factors, may be a harbinger for an entirely new way of operating.
“Together with climate change and global warming, the pandemic may be the prologue to more far-reaching and disruptive risk changes in years to come,” he said.
AGCS’ report identifies changing claims trends across the following insurance lines:
This latter point is, perhaps, the most significant. At a time when traditional working methods no longer sufficed, insurance was able to counter a severe handicap by utilising digital technology.
As technology continues to transform the sector, insurers must ensure that their company doesn’t fall behind in the transformation.