No-one knows for sure what awaits the insurance industry when we see each other again on the other side, but insurance law firm Clyde & Co paints us a picture by gathering insights from insurers who have their respective post-pandemic worries.
To come up with “The future of insurance” report for the Australian market, Clyde & Co asked its senior clients about their top coronavirus-related concerns and how they see the crisis affecting their business in the next 12 months.
It was found that 79% of insurers think the industry will be directly hit in terms of both investment performance and rising claims. In addition, more than half (52%) are worried about the likely impact on their employees.
Meanwhile, 63% are of the view that there will be greater legal and regulatory oversight of the industry as a result of the outbreak. Explaining why this is a possibility, Clyde & Co partner Avryl Lattin noted: “COVID-19 has certainly tested the social contract between insurers and their customers, which gives regulators a different lens through which to scrutinise the sector.
“In the current pandemic context, the value of insurance and the role played by insurers in society is being increasingly questioned by customers and regulators protecting customer interests, which may lead to unprecedented levels of regulatory intervention and supervision of the sector.”
As for product changes, the survey showed that reforms are expected to take place in the areas of travel insurance, business interruption, and trade credit.
“The post COVID-19 environment undoubtedly poses significant challenges to the insurance sector – but also presents unprecedented opportunity for those who are sufficiently flexible and adaptable,” commented Clyde & Co partner Dean Carrigan, whose camp believes insurers planning for recovery should focus on building consumer confidence and consider exploring alternative channels to engage with customers moving forward.
