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Insurance Carriers and COVID-19: Five things to Consider to Set You Above the Rest

This pandemic has afforded insurance carriers with a unique opportunity to re-evaluate how they operate independently, and how their actions can affect their attractiveness for new business.

4 years ago   •   3 min read

By The ReFocus Team

This is the second first article in a series about how COVID-19 is changing Workers Compensation. Other articles include:

Life as we knew it prior to COVID-19 will never return to what we deemed as “normal”. In the midst of COVID-19 spreading, and the temporary closing down of businesses, schools, gyms, and other venues, a common theme amongst many via their online posts was the thinking that they could not wait for things to return to normal. Even with creation of a vaccine and herd immunity, “normal” may never, and will most likely never be the same.

The good and bad part about having a new normal, is that it affords many businesses an opportunity to re-evaluate their operations, and refocus on how they are effectively, efficiently, and safely going to reach their goals. Insurance companies are no exception to this, and in order to run a smart, profitable, and competitive business, here are five things that carriers should consider.

1) First and foremost, the collection of good data is key.

  • From a claim’s standpoint, examiners must capture data pertinent to the root of how an employee(s) contracted COVID-19. This includes:
  • Dates employees worked,
  • The point at which employees were exposed to infected employees or the public (contract tracing), and
  • If employers had a safety plan in place that included providing employees with personal protective equipment (PPE)
  • Underwriters should also request similar data from current and potential policyholders to evaluate the risk involved with doing business with them. It will be telling if clients do not collect pertinent data related to how their employees and visitors (from a general liability standpoint) contract COVID-19 at their place of business. Brokers and underwriters should evaluate if their insureds are not complying with federal, state, and local laws.

2) Stay competitive by offering premium discounts.

  • The cost of doing business in the era of COVID-19 has increased. This is most obvious as businesses now have to provide PPE to their employees, increase intervals of sanitizing their workplace, and in some instances, have to keep ill employees on payroll if they are off work for a COVID-19 related and eligible reason.
  • Now is the time for carriers to ensure they are staying competitive! This is most obvious by providing premium discounts to carriers who correctly follow and implement all federal, state, and local mandated laws required to protect their employees, and public who visit their place of business.
  • Premium discounts are not foreign to keep current clients and entice new ones. Now is the time to think of what other discounts you can offer so you standout.

3) Analyze your data.

  • Create a report card that determines what a good policyholder looks like to you versus what a bad client looks like to you.
  • Suggestions include:
  • Determining what a high COVID-19 incidence rate looks like to you. This may fluctuate based on the nature of the policyholder’s business.
  • No-no’s of how COVID-19 was passed around at your client’s worksite. Some examples include employees not wearing PPE, employees not social distancing, and employees take a break in the same break room all at once.
  • Businesses who do not have a COVID-19 safety plan in place.
  • Once a report card has been established that measures a few important base points, analyze your insured’s data on a quarterly and annual basis to determine which policyholders are the biggest threat to you.

4) Increase internal and external communication.

  • The report card previously mentioned can be used as a focal point for brokers, underwriters, and claim’s staff to have internal discussions on the performance of your insureds.
  • For policyholders who have a “bad” grade, be sure to work with them to determine ways how they can decrease their claims.
  • Recognize good policyholders as well. Perhaps these clients will fall into a category for future premium discounts at time of their renewal.

5) Be prepared for the unexpected.

  • If there is one thing we all learned from COVID-19, is that we should all be prepared for the worst-case scenario.
  • What does this look like to your company?
  • What plans do you have in place to protect your company from being negatively impacted?
  • How are you still going to reach your short-term and long-term goals?
  • How are you still going to provide guaranteed services and superior customer service to your clients?
If you have a comprehensive and workable plan in place that allows your company to function and out-perform your competitors, you have set yourself above other carriers.

This pandemic has afforded insurance carriers with a unique opportunity to re-evaluate how they operate independently, and how their actions can affect their attractiveness for new business. This pandemic may be a point-in-time that shows the strength of a carrier’s ability to perform for its clientele. In a time where businesses are going to be more conservative as to where they spend their money, they are going to be a lot more selective with who they do business with. The above are five items that insurance carriers should consider that may separate themselves from the rest.

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