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James Dalton: Adapting to the challenges of COVID-19

As the insurance sector continues to adapt to new challenges in response to COVID-19, Director of General Insurance Policy, James Dalton, has highlighted here some of the action taken by the sector to offer enhanced help and support to their customers. 

There’s no doubt the coronavirus pandemic has thrown up unprecedented challenges that need to be addressed, right across the economy. Much of the focus has been on pandemic cover not being included in standard business insurance. This type of cover is rare, very expensive and cannot be insured by a domestic insurance market alone. Once the current coronavirus crisis is over, there will need to be a wider debate with governments around the world on how to tackle this issue, and the ABI is up for that debate. However, it should not detract from the significant amount of positive work being done by the industry to adapt and respond to the new world we are all adjusting to.

Like everyone else, our industry has had to adapt to working from home. This has meant changing the way thousands of workers operate while ensuring customers claims can be paid. Initial estimates show that travel insurers will have around 400,000 travel insurance claims as a result of Covid-19 and pay out £275 million to people whose travel plans have been disrupted. This is expected to be double the whole of the previous year’s claims for travel cancellation insurance and the most since records began. This is in addition to the £45 million paid out each day in motor and property claims, protecting people from everyday risks. Loss adjusters are deploying video technology such as Skype and FaceTime to carry out loss assessments and check damage of property and cars. This ensures customer claims can still be processed and paid with minimal human contact thereby reducing the risk of spreading the virus.

At a time of unprecedented crisis, new ways of doing this are needed. So insurers have been significantly flexing their policies to help and support customers and the wider economy. ABI members have signed up to customer commitments in travel, property, pet and motor insurance to provide enhanced support. Key workers and the hundreds of thousands of NHS volunteers who use their cars to help the community will not need to notify their insurer. Insurers will not penalise drivers whose cars are due a MOT but cannot get tested. For the millions of people working from home, home insurance policies do not need to be updated. Pet insurance customers will not have their policies invalidated simply because they were not able to get their pets vaccinated because of the current lockdown.  The private health sector is helping the NHS by providing much needed additional capacity.  Freed-up private hospital beds will help the NHS treat more patients affected by the virus and save lives. We’ve also worked collaboratively with the legal sector to deliver a cross-industry protocol to protect access to justice for injured claimants in the wake of the coronavirus outbreak. These changes by insurers to help and support their customers provide some relief during this unprecedented time, but ABI members are going further.  

Wider community support is being given to fight the virus. Donations have been made by insurers to the National Emergencies Trust, the Welsh Coronavirus Resilience Fund and British Red Cross. The £10million donation to the Red Cross is one of the single biggest corporate donations the organisation has received. Thousands of face masks, bottles of hand sanitizer and canisters of disinfecting wipes being donated to those in need to prevent the spread of the virus, including to the Wiltshire Air Ambulance. Insurers are giving extra support to volunteers and NHS workers.  Karshare, a free community car share scheme for volunteers in Bristol, have partnered with an insurer who is providing the necessary insurance for the scheme to go ahead. Another is offering NHS workers free breakdown cover, a free courtesy car if their car is involved in an accident, priority repairs to get them back on the road as soon as possible and free enhanced personal belongings cover for home contents customers if their belongings are lost, damaged or stolen while they are working or commuting. These are just some examples of insurers going above and beyond and I am sure more will emerge in the weeks and months ahead.

The coronavirus epidemic has thrown up new challenges for insurers, but it has also shown the industry is able to quickly adapt and innovate to offer enhanced support for customers in times of need. We will continue to work with our members on what further practical measures can be undertaken to help customers at this difficult time and after the crisis is over we stand ready to engage in the public policy discussion on how the global economy can be better insured against the risk of pandemics.

Last updated 06/04/2020