Understanding The Impact Of Covid-19 On Insurance

This is a no less known fact that coronavirus (COVID-19) is affecting every sphere of the world today and has brought even the most powerful nations down to their knees. Along with the loss of lives and livelihoods, several business organizations are on the verge of collapsing. And hence, apart from healthcare and other necessities, people are looking up to the insurance organizations to cope up with these unforeseen circumstances.

The insurance industry has witnessed many global crises over the years and has always strived to tackle the risk factors with their catastrophe response teams (CAT). But it's never been as easy as it comes off, and COVID-19 prevails putting immense pressure on insurance companies.

What are the insurance organizations are preparing up with?

The current pandemic crisis has halted the robust workflow of many insurance organizations due to the unavailability of viable sources and inefficient operational systems. However, many insurance companies already informed the prospects about the disruption in the services and long waiting on the contact centers because of the limited working personnel. Regardless, the insurers are constantly working to serve the customer's need of the hour with whatever they have in their hands.

Organizations around the world are vying towards maintaining a flexible working system to fulfill the requirements of the workforce. But some are still struggling with the situation and are yet to find a balance.

Role of technology 

Many policyholders are baffling and stressing about how the pandemic is going to affect their coverage, and that's entirely valid. Yet managing such a huge audience with the disrupted system is setting another challenge for the insurers.

However, technology has offered a medium to the companies to connect with a vast populace at a time and provide proper guidance to the customers throughout the crisis. The majority of insurers are encouraging their agents and employees to work online ever since the outburst of COVID-19. 

Also, uniting, along with different other stakeholders through digital platforms - the insurance organizations are putting their best efforts to help their clients in every possible way.

Issues of transparency among the groups

Insurance organizations have been charging additional fees to negate exclusions for natural catastrophes or other similar circumstances. This validates numerous questions raised by the customers, including- what is the need for insurance policies if they don't get to cover unforeseen situations? Or how can I trust the insurer for my future financial crisis?

So, who's at fault: the insurer or the policyholder?

Coming to the insurer's part, no organization could have solely prepared itself or its clients for something so unusual. One must also acknowledge the fact that the insurance industry needs to be commercially viable and must manage its solvency. Therefore, policy provisions and exclusions need to be practiced.

Narrowing down to the customer's part, this brings up questions of transparency and reliance. Besides understanding and covering one's risks through an insurance policy, an insurance provider must be transparent about all the crucial facts and figures.

What needs to be emphasized on post-COVID-19?

Forfeiting the coverage under the policies due to exclusions will surely mess with the heads of many customers, leaving them all baffled and frustrated. However, this pandemic will also urge the demand for better extensive business insurance policies and systems that can cover up for the voids addressed during the COVID-19 crisis. Hence, insurers must step into the realm to take the opportunities and accordingly work on the enhancement of their system and services.

Furthermore, healthy interaction, clarifying queries like - what is combined single limit, what comes under the split limit coverage, etc. with the customers should be a criterion before providing any policy. 

COVID-19 has highly impacted the insurance industry. And no doubt, making up for all the loss as the pandemic ceases to grow will be a challenging task.