All posts by Jeff Dunsavage
CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/14/2020)
CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/13/2020)
Coronavirus Wrap-up: Property and Casualty (4/9/2020)
Coronavirus wrap-upLife/Health(4/8/2020)
A.M. Best Holds Stable Outlook on U.S. Health Industry Amid COVID-19 Pandemic Crisis
Insurance rating agency A.M. Best said it is maintaining its stable market segment outlook on the U.S. health insurance industry, despite the impact of the COVID-19 virus outbreak. It cited:
- A trend of strong earnings;
- Strengthened risk-adjusted capitalization;
- Lower-than-estimated utilization and medical cost trends; and
- The cancellation or postponement of visits for routine care and elective procedures.
U.S. life insurers’ growing commercial mortgage portfolios may face virus pressure
U.S. life insurers continued in 2019 to increase their holdings of commercial mortgage loans, an asset class that industry participants say faces unique challenges during the coronavirus pandemic, S&P Global reports. The long-term nature of commercial mortgages makes them a good asset match for the long-duration liabilities life insurers carry. However, commercial mortgage loans could be under stress as the pandemic-sparked economic slowdown continues.
Calls for Medicaid expansion renewed as COVID-19 outbreak strains health care system
More than 50 Texas health policy and industry groups are urging Gov. Greg Abbott to expand the state’s Medicaid program to cover more than 1 million people as a way to slow the spread of the coronavirus and the illness it causes, COVID-19.
Coronavirus Reset: How to Get Health Insurance Now
Millions of people have lost jobs — and often the health coverage that came with those jobs. More still have had their work hours reduced or have received drastic pay cuts, so monthly premiums that may have been manageable before are now out of reach.
Estimated Cost of Treating the Uninsured Hospitalized with COVID-19
A great deal of uncertainty surrounds how the COVID-19 epidemic will evolve, including how many people will become infected and how many will become severely ill and require hospitalization. The Kaiser Family Foundation provides a range of cost estimates for the Trump administration’s proposal to reimburse hospitals for COVID-19 treatments for uninsured patients, based on results from recent studies and models.
Coronavirus Wrap-up: Property/Casualty (4/7/2020)
Below are abstracts and links to recent articles related to coronavirus from a property and casualty insurance perspective.
Auto:
Less driving, fewer accidents: Car insurers give millions in coronavirus refunds
One of the largest car-insurance companies in the country and a smaller Midwestern auto insurer are refunding hundreds of millions of dollars to their policyholders, citing a dramatic drop in accident claims from Americans hunkered down in their homes, The Wall Street Journal reports.
Allstate providing more than $600M to auto insurance customers amid pandemic
Allstate announced that it’s providing a Shelter-in-Place Payback to help its personal auto insurance customers during the pandemic.
Business Interruption:
This insurance would have helped in coronavirus crisis; nobody bought it
PathogenRX, a parametric insurance policy developed by broker Marsh, Munich Re, and technology firm Metabiota, is designed to provide business interruption insurance in the event of a pandemic, Insurance Journal reports.
Wimbledon nets £100m coronavirus cancellation payout
When the coronavirus outbreak forced the cancellation of Wimbledon it looked like game, set, and match against the All England Club. It turns out, The Times reports, that the club has insurance that covers infectious diseases and is putting together a claim potentially in excess of £100 million.
Insurers warn on forced payouts for uncovered coronavirus losses
World insurers told governments on Monday that making them pay out on losses suffered due to the coronavirus that were not covered by policies risked destabilizing the insurance industry, Reuters reports.
Considering a business interruption insurance claim due to COVID-19? Check your policy first
Insurance brokers say viruses and pandemics are specific exclusions in many such policies, which are often included with standard property and casualty coverage. But whether COVID-19 is the basis for a business interruption claim remains an open question as government leaders and the plaintiffs’ bar wrestle over the issue.
How social inflation may affect coronavirus business interruption losses
COVID-19 could produce a big increase in social inflation, according to A.M. Best. The reason: expectations that businesses will sue their insurers in an attempt to access their business interruption coverage for losses relating to the coronavirus pandemic.
After SARS, insurers changed policies covering businesses
SARS infected 8,000 people and led to millions of dollars in business-interruption insurance claims – including a $16 million payout to a single hotel chain. As a result, The Washington Post reports, many insurers added exclusions to standard commercial policies for losses caused by viruses or bacteria.
Flood:
FEMA extends flood renewal period
The Federal Emergency Management Agency (FEMA) announced that it will extend the grace period to renew flood insurance policies to help policyholders affected by the coronavirus (COVID-19) pandemic. FEMA said it would push back the grace period from 30 days to 120 days.
Property:
Florida’s property insurer of last resort, announced it will suspend cancellations and non-renewals for the next 45 days.
Wildfire:
First responders are preparing for raging wildfires that they expect will consume thousands of acres and drive some residents from their homes in upcoming months. But this year, CNBC reports, preparations have stalled. The coronavirus pandemic has hit the country’s already strained emergency services, raising concerns over inadequate disaster relief during peak fire season.
Workers Compensation:
Catch coronavirus on the job? In Florida, workers comp may not cover you
Florida’s Chief Financial Officer has ordered the Division of Risk Management to fulfill workers’ compensation claims for frontline employees who work for the state, the Tampa Bay Times reports. But the order doesn’t include similar workers in the private sector.
Auto Insurance Premiums Face Downward Pressure Due to COVID-19
Stay-at-home orders and other travel restrictions due to COVID-19 have limited the number of miles being driven and have consequently put pressure on auto insurers to rebate premiums or otherwise provide offsets, S&P Global Market Intelligence reports.
While U.S. private auto direct premiums written have not declined by more than 0.3 percent on a year-over-year basis in at least the past two decades, the pandemic risks maintaining this record. Certain state regulators and auto insurers are now taking steps to give financially burdened consumers additional time to make payments.
However, the article says, those steps may not be enough as public pressure increases. The Consumer Federation of America has proposed that auto insurers provide monthly offset payments to consumers to avoid what it alleged to represent the “windfall” profits the industry would otherwise produce.
Related:
Workers Comp Premiums Could SoarWith COVID-19 Claims
Health-care workers and emergency responders will benefit from rules eased in some states around workers’ compensation that will allow them to collect benefits if they can prove they caught Covid-19 on the job, Bloomberg reports.
But employers need to be aware of the changing rules and be prepared for the likely end result—skyrocketing premiums.
State workers’ compensation boards around the country are amending rules for benefits payouts to include health-care workers exposed to the virus and then quarantined. Attorneys are keeping a close eye on the questions, such as who should be eligible to receive benefits, how does a worker prove they caught Covid-19 on the job, and how will an influx of successful claims affect businesses’ premiums to insurance carriers.
Some say essential workers like grocery store employees and delivery workers also should qualify.
Related:
Advisen: COVID-19 prompts a host of questions for workers compensation cover
Health Insurers Waive COVID-19 Cost Sharing
UnitedHealthcare (UHC) this week became the latest major insurer to waive members’ cost sharing for COVID-19 treatments. The health insurer said it would waive the associated costs for members in its fully insured commercial, Medicare Advantage, and Medicaid plans.
UHC added that it’s working with interested self-funded employer plans to offer the same waivers.
Anthem announced similar steps, saying it would cover the cost-sharing for COVID-19 treatment through May 31 for its Medicare, Medicaid, individual market and fully insured employer plans. The insurer also said it was “strongly encouraging” its self-funded employers to adopt the waivers.
Anthem has also taken other steps similar to its peers in the industry, such as waiving the cost-sharing for testing and tele-health, and easing prescription limits.
Aetna, Cigna and Humana all previously announced they would waive members’ cost-sharing for COVID-19 treatment. These insurers also waived copayments and other cost-sharing for testing and telehealth visits.
Regional health plans are taking similar steps. Florida Blue announced Tuesday it would waive cost-sharing for treatment, as did Harvard Pilgrim Health Plan.
P/C Insurance Group Puts Price Tag on Coronavirus Business Interruption
An Insurance Journal article estimates that business interruption losses from the coronavirus just for small businesses in the U.S. could be as much as $383 billion per month, or 50 percent of the total available for the industry to pay all claims.
According to American Property Casualty Insurance Association (APCIA), that is 10 times the most claims ever handled by the industry in one year. The industry processed more than three million from the 2005 hurricane season that included Hurricanes Katrina, Rita, Wilma and several other storms, the trade group said.
APCIA president and CEO David Sampson said the coronavirus loss estimate assumes as many as 30 million claims would be filed by small businesses that suffered losses from the pandemic.
While the industry has little business interruption coverage to offer for the pandemic, Sampson said the APCIA is willing to discuss “forward-looking answers that speed economic recovery from future pandemics” with lawmakers.
Insurers back COVID-19 fund
The Insurance Journal further reports that a coalition of 36 business groups, including the insurance sector, has sent the Trump administration and Congressional leaders a letter expressing support for a proposed COVID-19 Business and Employee Continuity and Recovery Fund, a new federal relief fund intended to help businesses and workers suffering losses from coronavirus pandemic shutdowns. The fund aims to help businesses retain and rehire workers, maintain employee benefits, and pay such operating expenses as rent. It also may provide money for payroll, lost income of sick employees, and lost business revenues.
Insurers and other businesses would help create a process for quickly reviewing and processing applications filed by companies seeking help. The relief fund would be managed by a special administrator within the Treasury.
Related:
Insurers may need 90-day-rule relief for COVID-19 premium grace periods