Insurers have taken a massive hit as a result of the COVID-19 pandemic, and they are now looking at a future with greater risks, larger losses and more uncertainty. Yet, local insurers say they will also be the driving force in making the future more resilient, and in closing ‘protection gaps’ for their customers.
Delta Insurance COO Kent Chaplin, who recently delivered a resilience seminar as part of the Delta Talks programme, said that COVID-19 had challenged insurers and businesses like never before. However, he said the role of insurers in the recovery phase has been vital, and the role of insurance in the ‘brave new world’ will be about simpler products, easy access, and encouraging the public to look harder at how they transfer their risk.
“COVID-19’s loss profile is frightening,” Chaplin said.
“By April 2021, COVID-related insured loss estimates were around US$36 billion – but the predicted total global GDP economic loss is pegged at around US$4 trillion, according to German data specialists Statista.”
“COVID also challenged businesses by reducing the resilience of key systems to weather the shocks and allowing failures to cascade from one system to another,” he explained.
“The business landscape became more precarious because of drawn-out uncertainty and confusion over pandemic responses.
“Businesses have also had to manage both economic and health crises, develop new ways of engaging with both employees and customers and usher in new work behaviours, such as remote working – which raises questions around employee wellbeing management.”
Chaplin said the insurance sector now needs to think about current and emerging risks, and find ways to allow customers to transfer those risks as effectively as possible.
“We unquestionably have a role to make the world more resilient to that storm of threats, encouraging society to invest in risk transfer and close the protection gap,” he said.
“But we need to build simpler insurance products, innovate to meet emerging risks, and increasingly focus on safeguarding our customers’ reputations and their IP, increasing their readiness for new threats in the ever-changing risk landscape. The public and private sectors also need to collaborate more to achieve greater resilience.
“Above all, we need to focus on building trust and co-operate as an industry for the benefit of all our customers.”