The COVID-19 pandemic is a global health emergency on a scale not seen in generations. Already it has disrupted the global economy and thrown the future of billions into doubt.
The crisis is hitting the insurance industry more universally and faster than previous pandemics and economic shocks. Operational costs are rising due to crisis management, while premiums shrink in many lines of business. New business in motor insurance, for example, is declining as people drive less due to social distancing.
Investment returns are also under pressure due to volatility in financial markets.
In a month, the average insurer has lost:
Market capitalization impact from COVID-19
Stabilizing remote work
While these crisis conditions are not permanent, and insurers have navigated previous crises with resilience and ingenuity, we are already seeing a robust industry response. Insurers are enabling their organizations for remote work with digital technologies and a strategic communications plan to maintain business continuity and protect the health of their employees and partners.
What to do now
As insurers continue forward progress over the next three to six months, they will want to take a close look at:
What to do next
As insurers overcome the immediate impacts of the COVID-19 pandemic and take their places in the post-digital world, they may see further opportunities:
Ultimately, the insurance sector can serve as an important source of strength during the crisis and as a recovery mechanism for industry. If your team is looking for help in navigating these business capabilities, please reach out to our team.