Commercial insurance carriers are having to adapt quickly to changes in the marketplace due to the COVID-19 pandemic. One of the biggest changes has been the introduction of new products, such as gap coverage, business interruption & contingencies, event cancellation coverage, and more. This has brought about the need for reinsurers and partnerships to ensure policy conditions and commitments are being met. In this blog post, we will take a look at commercial insurance strategies in today’s post-COVID marketplace.
Challenges of Insuring the New Normal
As businesses work toward normalizing operations, the changing marketplace, inflation, and supply chain challenges make it difficult to determine when we will return to a previous economic flow or if this is, in fact, the new normal. As changes impact businesses both domestically and globally, commercial insurance carriers are seeing an increase in demand for coverage, capacity and the development of new products, the accelerated growth in product creation and emerging exposures, will create coverage and pricing challenges.
Many businesses were forced to close or scale back operations during the pandemic, forcing them to reimagine their business model. Are they prepared for the unknown risk? Two of the biggest concerns for businesses right now is business interruption and cyber exposures. Will the business have insurance coverage for an event that may suspend operations for a significant amount of time?
To meet the increased demand for commercial insurance coverage, insurers are turning to reinsurers for assistance. Reinsurers provide pricing support, capacity and balance sheet protection to insurance companies helping them through pooling and sharing underwriting risk. By working with a reinsurer, commercial insurers can mitigate the underwriting risk associated with emerging exposures.
Insurtech in Commercial Insurance
Of the new commercial insurance strategies that have been adapted in the post-COVID marketplace, the increased use of technology—apps, platforms, and automation—help accelerate and offer a high level of accuracy within the underwriting process. This adaptation includes the use of data and analytics for identifying risks and price policies more accurately. An added benefit of more technology in the policy origination and pricing process is the use of parametric triggers. This type of trigger can be used to automatically adjust policy benefits and limits as local events—geological, meteorological, and health outbreaks occur.
Workers Compensation Claims for Remote Workers
Another big challenge commercial insurers are facing is the increased demand for workers’ compensation insurance. With more people working remotely, there is an increased risk of injury or qualifying workers compensation claim—whether it’s due to a slip and fall at home or carpal tunnel syndrome from working at a makeshift desk. Workers’ compensation insurance can help protect businesses from the cost of medical expenses and lost wages for employees who are injured on the job.
As commercial insurers adapt to the changing landscape, it’s important to partner with a carrier that has the experience and knowledge to help you navigate these challenges. At ENGS Insurance Agency, we have strong underwriting expertise in a variety of industry segments. Our experienced team has decades of expertise across a wide range of industries, with a variety of commercial carriers, we can find the right coverage solution for your business at the best possible price.