by Terry
Gangcuangco 01 Aug 2020
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.
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