Bain & Company – Are You Covered? An Insurance Executive’s Checklist to Handle the Covid-19 Turmoil

Executive summary :

Insurers need to support employees and agents in their remote work pressure-test IT systems and get closer to customers

What is the future for insurance?

At a glance

• Leading insurers have refashioned their operations to meet the coronavirus challenge, and their responses point the way for insurers worldwide.
• The leaders have acted quickly to protect their employees and agents, through stricter, targeted safety protocols.
• They have adjusted their IT investments, fortified the infrastructure for remote work and accelerated the digitalising of many processes.
• Leading carriers are also going the extra mile for customers, with extended coverage, extra services, 24 hour hotlines and new medical indemnifications.

What will insurance cover?

Consumers and business owners tend to think about insurance only sporadically. Suddenly, they have a number of insurance concerns since Covid-19 disrupted everyone’s work and home life, as well as their finances. Many people worry not only about their health, but also what their insurance will cover.

Will travel insurance reimburse canceled trips? Will health insurance cover tests and treatment for the coronavirus? Will business-interruption insurance kick in, and what does it cover? Will insurers’ capital remain adequate if capital markets continue to crash?

Keep calm and carry on, insurers

For insurers themselves, which often must improvise as they go, the pandemic has thrown operations into round-the-clock emergency planning and extensive work- at-home modes. Investors have pummelled their stocks (see Figure 1). For life insurers, lower bond yields could also mean hard times, because they invest customers’ premiums heavily in corporate bonds.

The scope of the challenge can seem overwhelming to insurance executives. Fortunately, our recent work with insurers, combined with observations of the industry worldwide, yields a useful short set of actions to guide executives in the weeks and months ahead. The approach should have two streams: act now to protect the business, and plan now for the trajectory beyond the immediate crisis.

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