The coronavirus health crisis may have shut Australia’s borders and forced many employees to transition to remote working, but Colin Fagen (pictured), managing director of Blue Zebra Insurance, says the pandemic has also delivered some benefits for business, particularly within the SME sector.
Through his insurtech-led underwriting agency’s “heavy analysis” of SME experiences during the COVID-19 pandemic and its subsequent lockdowns, Fagen says he anticipates the sector could emerge “more positively” with fewer exposures.
“In our mind, it’s organisations that are more flexible and more adaptable that will succeed more quickly,” he said. “Watching and analysing the small business market, we think there’s opportunities, especially in motor insurance.”
While there have been many voices in the insurance industry that have warned of an increase in claims following the pandemic, Fagen disagrees and instead believes insurance risks have actually decreased due to changes in human behaviour.
“In some areas, potential exposures have improved. In motor insurance, it looks like it improved pretty much immediately with respect to less people being on the road driving their cars. Some areas like public liability have also experienced potential improvements with respect to exposures,” he explained.
However, in spite of this observation, Fagen also acknowledged there may be a few areas of insurance that could see an increase in claims.
“We have knowledge that with business interruption, it could potentially be impacting a few insurers,” he continued. “In our landlord products, there’s a rent default exposure in a lot of them and that’s generally the case with most of the landlord products in the market. We have seen a small amount of increases in this area throughout the moratorium period but it’s not particularly material.”
But the true extent of these claims will not be evident until the industry sees “what’s happening in the last quarter of this year,” he added.
Additionally, Fagen says the economic and risk management enacted by state and federal governments at the onset of the pandemic, and indeed throughout it, has aided the industry in mitigating its risks.
“Generally, the government’s approach to COVID-19 seems to be reasonably successful,” he said. “It seems to have settled down the economy at this point in time. I think everyone’s still a bit worried about what’s happening in the next three to four months, but generally, from what we’re seeing in our industry, the negative effects have been mitigated.”
As for his own business, Fagen says Blue Zebra Insurance was able to adapt and respond to the pandemic quickly because of flexible arrangements that were in place before the health crisis.
“We were fairly flexible before. However, we’ve now got a lot of people working from home and that seems to have worked really well for us, it means we’ve been able to actually get people focused on a lot of the projects that are three to six months in the making,” he said.
“I have found that their productivity has actually improved, we’ve been able to get projects done more quickly.
“I also think individual employees now feel more comfortable working from home so I think they will take that up a lot more. It looks like it will be here to stay.”