The spread of the coronavirus and COVID-19 – and how governments, businesses, and individuals are dealing with it – raises many issues relevant to property/casualty insurers and their customers.
Triple-I has launched a webpage
to help readers find what they need from the information we gather and curate.
The issues we track range from operational challenges posed by the virus to
likely impacts on claims and losses to the possible introduction of legislative
and regulatory solutions that might affect insurance underwriting and pricing.
We discuss these multi-faceted issues and impacts from our
position as a trusted source of unique, data-driven insights on insurance. The
page will have links to Triple-I reports and presentations on the topic, and
links to many of our blog posts grouped by the following categories:
As quickly as the coronavirus
is spreading, so is the amount of published information available to help
insurers and their customers navigate this confusing environment. But
separating information from misinformation and the truly useful from the merely
“nice to know” can be a challenge.
As a service to our readers,
Triple-I Blog is aggregating and sharing some of these resources. We’re
gathering links and descriptions into blog posts like this one and have
established a page on our website – COVID-19: Issues and Impacts – that categorizes the posts and makes them easier to
find.
As part of its effort to provide information on workers comp legislative
activity, NCCI also monitors workers compensation-related bills in all jurisdictions
and the federal government. You can follow such activity here.
On the non-P/C side, The New York
Times published Coronavirus
May Add Billions to the Nation’s Health Care Bill, which
warns that health insurance premiums could rise as much as 40 percent next year
as employers and insurers confront the additional costs associated with the
pandemic.
One-year projected costs in the national commercial
market range from $34 billion to $251 billion for testing, treatment, and care specifically
related to COVID-19;
Potential COVID-19 costs for 2020 could range from
about 2 percent of premium to over 21 percent if the full first-year costs of the
epidemic had been priced into the premium;
Health insurers are setting rates for 2021. If
they must recoup 2020 costs, price for the same level of costs next year, and protect
their solvency, 2021 premium increases to individuals and employers from
COVID-19 alone could range from 4 percent to more than 40 percent.
Two recently published pieces provide historical comparisons
of COVID-19 with the 1918 global flu pandemic:
National Geographic has published How Some Cities Flattened the Curve During the 1918 Flu Pandemic, which shows how social distancing saved thousands of American lives during the last great pandemic. The piece includes some great data visualizations depicting how the flu played out from city to city.
U.S. insurers are covering employees and employers facing exposure to COVID-19 while easing the financial burdens of their customers and communities during an extraordinary time in the nation’s history, according to the Insurance Information Institute (Triple-I).
“These are challenging times for insurance customers, and the industry is doing all it can to be a financial first responder. Workers compensation insurers are providing coverage to health care workers and first responders in multiple states,” said Triple-I CEO Sean Kevelighan. “Business insurers are protecting financially the restaurants who now offer take-out and delivery services. Beyond that, insurers are extending coverage and payment relief to customers who are struggling financially.”
A Triple-I Fact Sheet, Insurers Are Engaged In the COVID-19 Crisis, outlines how the industry’s financial stability allows insurers to keep the promises made to policyholders in the event of tornadoes, hurricanes, or wildfires. The Fact Sheet also notes how insurers are contributing to COVID-19 related charities, such as food banks and medical supplies.
“Pandemics are an extraordinary catastrophe that can impact nearly every economy in the world, so it is hard to predict and manage the risk,” Kevelighan said. “Pandemic-caused losses are excluded from standard business interruptionpolicies because they impact all businesses, all at the same time.”
Moreover, the exclusion for pandemic-caused losses has been incorporated into standard business interruption policies for years.
A standard business interruption policy typically covers a business when it incurs direct physical damage due to a covered loss, such as a windstorm or a fire. Covered business interruption policy losses—even from a hurricane or a terrorist attack—impact only a portion of the U.S. rather than the entire nation.
Tough times bring out the best in many people, and the
ongoing COVID-19 pandemic is no exception.
Citizens around the world are donating to crisis response
organizations, sewing masks and gowns for
medical workers, delivering groceries to homebound neighbors and boarding
shelter animals.
Corporations also are rising to the occasion. MetLife (a
Triple-I member company) is providing parking lots at its St. Louis office
location for the local hospital, Mercy
South to use for coronavirus drive-through testing.
And the
MetLife Foundation has committed to donating $1 million to food banks
across the U.S. to help them deal with increased demand for their services as a
result of coronavirus.
Food banks face the challenge of getting shelf-stable food
into people’s homes as quickly as possible, especially now that vulnerable
populations, such as the elderly, have been advised to practice social
distancing. In addition, food banks face greater need from families with
children who no longer have access to meals at schools.
MetLife Foundation will donate funds to food banks in
communities where MetLife, Inc. has a significant presence, such as the greater
New York City area, Cary, N.C., Tampa, Fla., and Warwick, R.I.
“We want to help those impacted by coronavirus,” said Mike
Zarcone, head of Corporate Affairs for MetLife and Chairman of MetLife
Foundation. “That includes the communities where we work and live. We know that
children out of school and seniors face food insecurity as a result of
COVID-19, and we are committed to help.”
Prudential also is helping. Over the weekend, the Newark,
N.J.-based insurer donated
more than 150,000 protective face masks and respirators to the state.
“A least one
New Jersey hospital” NJ.com reported, “is now down to a
four-day supply of gowns
and surgical masks.”
The masks and respirators, expected to provide a two-week respite
for hospitals, were in storage at the company’s Newark headquarters. They had
been stockpiled after the 9/11 terror attacks as part of the company’s
emergency preparedness efforts.
If your company is helping those affected by the pandemic, email me at marias@iii.org and tell me about it.
To help arrest the spread (“flattening
the curve”) of Corona Virus Disease (COVID-19), businesses and schools
everywhere are supporting social distancing by expanding remote workspace opportunities.
At the Triple-I’s main offices in New York City and Arlington, Va., we
encouraged our team members effective Thursday, March 12, to avoid unnecessary
business travel and select the workspace arrangements that best support social
distancing.
Laura Favinger, Triple-I’s Chief Administrative
Officer explained in a Q&A session with James Ballot, the Triple-I’s Senior
Advisor, Strategic Communications, the organization’s Human Resources policies concerning
COVID-19, as well as some potential consequences of widespread remote work
during the crisis.
Q: How prepared is Triple-I to ramp up
to extended duration remote work?
LF: The Triple-I is very prepared to
conduct its business away from its two main offices for an extended period of
time, if need be.
We talk a lot about resilience because
we’ve experienced first-hand why resilience works. During Superstorm Sandy in
2012, the Triple-I’s main office in New York’s Financial District was forced to
close for nearly two weeks because 110 William Street was inaccessible due to
the flooding in lower Manhattan. The situation left most Triple-I team members without
access to vital equipment and information. Times like this, unfortunately, are
also when people need the Triple-I most. With this in mind, we’ve built out
capabilities to ensure that we’re able to fulfill our mission to be the “trusted source of unique,
data-driven insights on insurance.” We’re here to educate and inform the
media, consumers, regulators, educators and others with as little disruption as
possible. Since Sandy we’ve prepared for a wide range of contingencies by
migrating to a decentralized information backbone (cloud-based file sharing and
storage), accessible to the entire Triple-I team by laptop and tablet computers
and mobile devices.
Since I arrived at the Triple-I just
over two years ago, we’ve made significant strides toward creating even more
robust, user-friendly and, yes, resilient standardized IT platforms. One
collateral benefit of this effort is that we’ve brought on staff full-time
subject matter experts and researchers who are based throughout the U.S., which
has increased our ability to deliver fact-based information and answers to our many
audiences. We had no idea a pandemic was coming, but I guess that’s the essence
of resilience: assessing and mitigating your potential risks.
Q: What factored into the decision to
encourage your team members to choose the workplace situation that best
supports preventing the spread of Corona Virus Disease?
LF: For starters, we were prepared to
do this, which made the decision easier. As mentioned, our team is
geographically and demographically diverse. COVID-19 poses a greater threat to persons
over the age of 60 and those with existing health complications. We’re
encouraging them to decide for themselves what’s best. To simplify things,
we’re making full-time remote work available to everyone at the Triple-I’s NYC
and Arlington, Va. offices for the foreseeable future. We’ve set Friday, March
20 as our first milestone for review.
Q: Any potential “curveballs” that you’re becoming aware of?
LF: Well, the closing of schools is a bit of a disrupter because it
gets crowded at home when parents and their school-aged children spend all day
under the same roof. But supporting remote work in general has allowed us to
balance professional and personal concerns. One thing we all need to monitor,
however, will be the
prospect of millions of people working and studying from remote locations at
the same time—and this includes increased load from streaming media (which
already accounts for more than two-thirds of all Internet traffic). We’ll need to monitor the possibility of
overloaded information networks and other infrastructure-related consequences
and explore ways to mitigate the effect on the Triple-I’s productivity.
But the main goal—the only goal, actually at least for the
foreseeable future—is for us to do our part to stop the spread of COVID-19.
By Loretta L. Worters, Vice President, Media Relations, Insurance Information Institute
When Barbara Bufkin started in the
insurance industry nearly four decades ago, she didn’t think about women’s
roles. She started her career as a
commercial underwriter, then a casualty facultative underwriter to a
reinsurance intermediary. In fact, in the
first five years of her career she had four job changes – unheard of at that
time.
Today,
many would say she has exceeded her goals.
She is Chair of the International Board of Governors of the Insurance
Industry Charitable Foundation (IICF), directly engaged in the global and
national Women in Insurance Conference series, and President of the Association
of Professional Insurance Women (APIW). Concurrently, she advocates for the
value of the insurance industry as a career of choice in her role as Co-President
and Board of Trustee of Gamma Iota Sigma (GIS) and as a keynote speaker on The
Power of Purpose in various insurance industry forums. In these initiatives,
she has been driving the Big Tent of culture, inclusion, innovation,
sponsorship, mentoring talent and the power of networks.
In
addition to her Board responsibilities, Bufkin is on the advisory board of ODN,
an early round InsurTech. She is Ambassador of The Insurance Supper Club, and
member of the Dallas Host Committee for 2020 Women on Corporate Boards. In June
2019, she completed the EY Course: Board Readiness in a Transformative Age and
has now taken on a new role as senior advisor to AmWINS
Access.
But
this success didn’t come easy. Bufkin recognized that there were corporate
barriers which she had to learn to navigate.
But through that navigation she learned how to negotiate, a skill
greatly needed in the business world. She
had the courage to build the career she envisioned for herself by seeking out
mentors whom she trusted.
Barbara Bufkin, senior advisor, AmWINS Access chair, Insurance Industry Charitable Foundation
One
area Bufkin could identify with was not only having a successful career but
balancing that career with children as well as being a caregiver for aging
parents; being responsible for a family.
“It was a very… productive time,” she grinned.
Bufkin said it was important now to help
build up the industry during a time of rapid replacement of talent. “For young woman who choose a career in
insurance, it’s a great business to be in.
It’s much more secure during cyclical changes and economic
downturns.”
Bufkin noted that there is a great need
for women’s training. “We need to make sure that women’s voices when they are
not in the room are being heard,” she said, adding that “we need to prepare
women for executive roles. Giving women
strong coaching to be more conscious of their own capabilities and confidence,
to overcome ‘imposter syndrome’ and consider themselves for a position when
they may not have felt ready for it.”
“When I transitioned over to the capital side of the business, I really didn’t know what a glass ceiling was. When I confronted it, it had to be shattered; I didn’t think of it any other way.”
Bufkin said that the statistics and studies that are being conducted now are creating a true awareness around the importance of gender equality and pay equality. “There’s an intentional and committed focus around this,” she said.
“We as women need to be fearless; to accept the challenges and sometimes to understand defeat. And by doing so, can we stand back up and do it better, bigger, greater and stronger.”
By Loretta L. Worters, Vice President – Media Relations, Insurance Information Institute
Women are advancing throughout the insurance industry. Hard work is one factor behind their success, but so are perseverance, supportive mentors, and willingness to take risks with their careers.
Women’s History Month is a time to reflect on the work that
still needs to be done, but it’s also a time to celebrate the inroads that have
been made. The Insurance Information Institute (Triple-I), has created a series
of interviews showcasing dynamic women leaders — trailblazers who have built
successful careers in the industry. We’ll hear their stories, providing insight
on how they made it to the C-suite and their advice to young women just
entering insurance.
Check back to see the interviews by clicking on this link: #womenshistorymonth
Challenges
remain
Studies have found that greater gender diversity can help
organizations be more innovativeand higher performing. Many female CEOs have led their companies’ stocks
to outperform the index in terms of cumulative total returns during their
tenures. Some have managed to produce triple- and even quadruple-digit
percentage gains.
More specific to the insurance industry, a
McKinsey report found that while women outnumber men at
entry-level positions, their representation of the workforce is significantly
smaller near the top of the organizational chart.
Women of color in insurance hold only 12 percent
of entry-level roles and a mere 3 percent of direct-reporting roles to the
CEO. And black, Hispanic, and Asian
women altogether make up only 3 percent of the insurance C-suite.
Growing Wages for Women Helped Narrow Gender Pay Gap, Though Women Still Lag Behind Men in Pay
According to PayScale.com women are often undervalued for the work they do, are more
likely to hold lower-level, lower-paying jobs, and tend to stagnate in their
careers, still making only $0.79 for every dollar made by men in 2019. Moreover,
Hired.com’s State of
Wage Inequality in the Workplacefound that companies pay women on average 4 percent to as
much as 45 percent less than men in the same jobs — and these numbers haven’t
changed since the company released its second annual 2017 report. In addition, 60
percent of the time men are offered higher salaries than a woman, for the same
role at the same company. The survey further reveals that of the 61 percent
of women who discovered they were being paid less than men at the same role in
their company, 16 percent found the difference was at least $20K.
Women’s experiences in
the workforce also vary vastly by race.
PayScale.com noted that black and Hispanic women experience even wider
pay gaps than white women, start their careers in lower-paying positions, and
are less likely than white women to make it to the C-suite.
Anddisparity in earnings inevitably leads to a disparity in retirement savings, according to the National Committee to Preserve Social Security & Medicare, which has further implications for women, who generally have a longer life expectancy than their male counterparts.
Swiss Re Institute estimates that a 26 percent increase in global
GDP in a scenario of labor market gender parity would yield an additional $2.1
trillion in global insurance premiums by 2029.
How the Industry is Working to Make a
Difference
“By focusing on solutions to achieve gender parity, insurers and reinsurers can address a key driver of the widening protection gaps facing individuals, families and societies.”
–Marianne Gilchrist, Head Global & South Asia, Hong Kong, Swiss Re
Insurers are making significant strides to improve gender diversity by creating sponsorship programs and addressing unconscious bias. There is, for example, the Bloomberg Gender-Equality Index, which tracks the financial performance of public companies committed to supporting gender equality through policy development, representation, and transparency.The 2020 Bloomberg Gender-Equality Index includes 325 companies across 50 industries, including insurance headquartered in 42 countries and regions.
Here are a few of the organizations that are making a tremendous difference:
Association of Professional Women is dedicated to encouraging women to embody the future of insurance through participation, progressive education, and engagement with forward thinking industry professionals.
Insurance Industry Charitable Foundation (IICF) and their Women in Insurance Conference Series, led by pioneer Elizabeth (Betsy) Myatt, vice president and chief program officer of IICF.
Women’s Insurance Networking Group (WING) which helps increase awareness through events and are a platform to share skills and knowledge.
Women in Insurance Initiative (WII) is a consortium of organizations throughout the insurance industry, which is taking substantive and measurable action by recruiting, mentoring, and sponsoring women to drive equality in career advancement and leadership throughout the insurance industry.
Last week (March 4-6) the National
Earthquake Conference — attended by
hundreds of experts, including
academics, engineers, government leaders, insurance professionals, and
scientists – took place in San Diego.
The day after the conference, as if to make a point, a 5.5.
magnitude earthquake that
struck Baja California, Mexico, shook San Diego.
While no damage was reported, a study released
at the conference by the San Diego chapter of the Earthquake Engineering Research
Institute showed that a magnitude 6.9 earthquake on San Diego’s Rose Canyon
Fault could damage 100,000 residences, cause widespread road and bridge
failures, and make parts of Mission Bay sink about a foot. Such a quake would
inflict an estimated $38 billion in building and infrastructure damage,
displacing 36,000 households and wreaking havoc on San Diego’s $245 billion
economy.
Don’t be scared, be prepared
Conference goals were to improve life safety when earthquakes
occur, to help communities learn how to recover faster, and to help prevent or
minimize physical earthquake damage through stronger building practices,
including research-informed, model building codes and standards.
Janet Ruiz, Triple-I’s Director of Strategic
Communications, who was one of the attendees, said one of the great points of
the conference was: “Don’t be scared, be prepared.”
Earthquake risk is insurable
One of the ways to be prepared for any disaster is to make sure you have adequate insurance. But as few as 13 percent of California homeowners have earthquake insurance.
Glenn Pomeroy of the California Earthquake Authority said earthquake risk is insurable. The average annual cost of earthquake insurance for a typical home in San Diego is between $100 and $444. Renters can secure financial protection from CEA for as little as $35 per month.
By Loretta Worters, Vice President, Media
Relations, Insurance Information Institute
Millennials – the generation born between 1980 and 2000 – have begun to
influence charitable giving. They prefer
to work for companies that are involved in charitable causes, seeking a greater
desire to make a social impact through their work, compared with previous
generations. In addition, they tend to
share these values on social media.
These are some philanthropic trends in insurance industry Corporate
Social Responsibility (CSR), identified in “Charitable Giving in the Insurance
Industry,” a report by the Insurance Industry Charitable
Foundation (IICF),
released in partnership with McKinsey & Company. The report, along with
IICF’s 2019 Philanthropic Showcase, highlight each of its Key Partner
Company’s charitable endeavors in 2019.
The McKinsey
report found that the level of giving has remained consistent, with a focus on
education, health and social services, and community. One key factor behind
this finding is industry consolidation, which has lowered the number of
companies engaged in corporate giving. Insurers are also orienting philanthropy
more around volunteerism. As a result, industry-wide giving has held steady
between $560 million and $600 million in cash, grants, and other donations
since 2015.
In addition to
the influence of millennials on the types of charitable engagements companies
pursue within their communities, the report offers a glimpse of the industry’s
philanthropic commitment and highlights opportunities to expand programs and
fuel community engagement. Charitable giving in the insurance industry
continues to be an important focus.
Some of the report’s key findings, based upon responses
from property and casualty companies and for the first time since 2011 life
insurance and wealth management segments of the industry, include:
• The industry’s desire to work toward a single cause has
increased to 33 percent in 2019 from 17 percent in 2015.
• The importance of giving within their own communities was
evident as about 30 percent of respondents in 2019 prioritize contributions
where employees live and work and where significant business is already done.
• Insurers have shifted their charitable focus toward
increased volunteering opportunities, recognizing millennials prefer to work
with companies directly involved in charitable efforts and activities, rather
than those making only monetary donations.
• Measurement of charitable giving has increased, to 41
percent in 2019 from 26 percent in 2015, as more companies use key performance
indicators to evaluate the impact of their philanthropy.
For organizations looking to amplify either the impact of
their philanthropic efforts or the range of causes, the findings point to a few
key opportunities including planning for greater employee engagement, with a
special focus on millennials to further employee-focused giving strategies; to measure the impact of philanthropy to
identify and build on charitable successes and refine metrics and giving
standards; to rethink roles across the giving organization as CSR leadership
and employee-driven engagement become increasingly common and CEOs continue to
set broad direction; and finally to consider the value and benefits of a
united, collaborative industry approach to CSR.
The Insurance Information Institute invited its members to a webinar titled “Covid-19’s Impact on Health, the Economy and Growth” on March 5 at 11:00 a.m. EST presented by Triple-I Vice President and Senior Economist Michel Léonard, PhD, CBE.
Dr. Lèonard will discuss the following key points:
• Economic impact likely to continue into Q3/Q4 2020 and 2021 • Could reduce global growth by as much as 1 percent and delay recovery by up to 12 months • Fiscal and monetary policy, rates cuts, unlikely to be effective • Insurance industry to see higher claims, reduced premium growth
He will also preview the Global Macro and Industry Outlook report before it is made available to the public.
To find out more about the benefits of Triple-I membership click here.
