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 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.
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.
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.
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.
We’ve been following the initiatives launched by insurance companies to alleviate the impact of the coronavirus crisis (see Insurers Respond to COVID-19). Here are several more examples of insurers’ commitment to helping their agents, employees, customers, and the broader community weather the pandemic.
The
Hanover has
taken several steps to help ease the burden for customers, including:
Considering a covered premise as
“occupied” while mandatory closures are in effect
Extending rental car days if a
policyholder’s vehicle is in the shop and cannot be repaired or returned
Paying additional living expenses to
homeowners who are forced from their homes following a covered loss
Offering flexibility on bill payment
options for those experiencing financial hardship
A 60-day hold on cancellations and
non-renewals for non-payment
Permitting business use of hired,
non-owned autos for delivery purposes at no additional charge and extending
personal auto coverage to individuals delivering food, medicine, and other
essential goods at no additional charge
The company
is also investing in relief efforts,
including $500,000 to local non-profits to
provide pandemic-related assistance to people and organizations across the
country; donating critical medical supplies and masks to health professionals;
and collaborating with corporate teambuilding company Cheeriodicals to deliver
“cheer-up” gift packages to local hospitals to show appreciation for health care providers.
Liberty Mutual has created a $4
million fund offering low-threshold, immediate grants of up to $10,000 for 450
community partners – with priority given to groups providing healthcare or
serving the homeless, elderly, and other populations deemed at highest-risk.
Liberty Mutual employees continue to be able
to make online charitable donations that are supported further by company
gifts.
The company has also enabled employees to work
remotely and reports no impact to normal customer
service operations.
The MetLife Foundationannounced on March 31 that it is committing
$25 million to the global response to COVID-19 in support of communities
impacted by the pandemic.
The grant funding from MetLife Foundation will span all regions where MetLife
operates and address both short- and longer-term relief efforts.
“Supporting and protecting
people is at the core of who we are and what MetLife stands for – in our
business and in the Foundation’s giving,” said MetLife President and CEO Michel
Khalaf.
Initial grants will
support communities and people with urgent needs for food, healthcare,
childcare, and direct financial support.
As part of this
commitment, MetLife Foundation and other MetLife entities have already pledged
$4 million to relief efforts in Asia, EMEA, Latin America, and the United
States, including $1 million to U.S. food banks to help them deal with
increased demand for their services as a result of coronavirus.
State
Farm is donating
millions of
dollars to
relief efforts, including Feeding America, American Red Cross, and the Illinois
COVID-19 Response Fund. Additionally, the company has also donated hundreds of
masks and other supplies to local hospitals and teamed up with the Atlanta
Hawks to help provide meals to vulnerable populations and healthcare workers in
Atlanta.
State Farm has also transitioned most
employess to work from home arrangements and has set-up a matching-gift program
in which employees donations to qualified nonprofits can be matched by the
State Farm Foundation.
State Farm customers who are experiencing
financial hardships are encouraged to call their agents to discuss assistance
options.
Westfield Insuranceis providing billing
options for financial hardships and suspending all policyholder cancellations
until May 31, 2020, or as directed by each state. Extended payment plan may be offered to those
policyholders. As of March 20, 2020, late fees also will be waived through May
31, 2020, or as directed by each state.
Westfield will contribute nearly a million
dollars toward nonprofit partners, including the Akron Canton Foodbank,
Cleveland Foodbank, United Way of Cleveland, Feeding Medina County, and Feeding
America.
Westfield’s foundation is matching employee
donations to their local foodbank or United Way dollar for dollar up to $50. The
company is also working with agency partners across the country to distribute
Legacy of Caring grant dollars for them to donate to nonprofits in their
community who are challenged because of COVID-19.
As a regulatory/government solution, trade
groups representing insurers have voiced support for the
proposed COVID-19 Business and Employee Continuity and Recovery Fund. It would
be financed by the federal government and provide essential funds to impacted
employers and employees.
Tell us how your company is contributing to the
pandemic relief efforts: communications@iii.org.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Insurance companies are working to alleviate the impact of
the COVID-19 crisis by supporting their employees and distribution partners,
donating money to global relief efforts and easing the financial burden on
their customers.
Triple-I has published a fact sheet, Insurers Offer
Forward-Looking Solutions for COVID-19 Recovery, which
outlines how the industry is easing its customers’ financial burdens, working
with government to create a COVID-19 Recovery Fund, and making sure it has the
resources to pay future claims from events such as hurricanes, tornadoes, and
wildfires.
Here are a few examples of what individual companies are
doing:
Allstate
will automatically cover customers who
use their personal vehicles to deliver food, medicine and other goods for a
commercial purpose. Standard personal auto policies typically exclude such
coverage. This change will allow customers to serve those who depend on their
services and support.
Allstate also announced a special
payment plan to provide customers financial relief. The plan gives auto and homeowners
policyholders the choice to delay two consecutive premium payments with no
penalty. In addition, Allstate is pausing policy cancellations due to
nonpayment during the declared COVID-19 state of emergency. This includes
Allstate Business Insurance policies.
Ninety percent of Allstate’s global
workforce is working remotely. Allstate will continue to pay employees (full or
part time) who can’t work remotely and have shelter-in-place orders during
their normal work hours. Well-being services like telemedicine, prescription
home delivery, and emotional and financial support lines are available to
Allstate’s U.S. employees.
American
Family Insurance along
with the American Family Insurance Dreams Foundation, announced more than $4 million in support for
COVID-19 pandemic relief and other non-profit efforts. Additional support from
the Steve Stricker American Family Insurance Foundation is expected to push the
total support to more than $6.8 million.
“The pandemic
has left many struggling to meet basic needs while at the same time adapting to
a new and unsettling normal,” said Maggie Pascaly, American Family community
investment manager. “We want to help meet short-term needs of individuals,
families and communities, while also addressing longer-term effects.”
The company’s employees and agency owners can support local organizations of
their choice by using a 2:1 foundation match offered during a six-week time
period beginning March 31. The foundation will match donations totaling up to
$250,000, for a maximum additional investment of $500,000. Organizations that
provide pandemic relief will be suggested for consideration.
Chubbannounced that it is committing $10 million to
pandemic relief efforts globally. The support will go to people and
programs providing emergency frontline services and for assistance to the most
financially vulnerable members of the community who have been impacted the
hardest by the pandemic.
The company also announced that it will not conduct any layoffs of its employees while in the midst of the COVID-19 pandemic health crisis, and has added employee benefits such as additional sick days.
“We are
committed to supporting people, business and communities most impacted by this
global crisis,” said Evan G. Greenberg, chairman and chief executive officer.
“Our $10 million commitment will add to the urgent efforts required to meet the
immediate health and nutrition needs of those most affected. Concerning
our no-layoff pledge, we want our 33,000 employees around the globe to be
assured that their jobs are secure at this difficult time.”
Travelers has initiated a distribution support plan to
accelerate more than $100 million in commission payments to eligible
distribution partners.
“As so many are
facing a significant financial burden due to the COVID-19 pandemic, we want to
show our agent and broker partners, many of whom are small business owners, our
support at this challenging time,” said Alan Schnitzer, chairman and chief executive
officer of Travelers. “Independent agents and brokers not only provide
invaluable counsel and care to our customers but also play a critical role in
the U.S. economy, and we are committed to standing by them.”
Bob Rusbuldt, president
and chief executive officer of the Independent Insurance Agents & Brokers
of America, said: “Travelers has always been the premier supporter of
independent agents and brokers, and the Travelers Distribution Support Plan
takes that support to a whole new level. We want to thank Travelers for their
continued industry leadership.”
The commissions
being accelerated were accrued in the ordinary course of business during the
quarter ended March 31, 2020, and accordingly, this program will not have a
significant impact on the company’s results.
MAPFRE, an
insurance company based in Spain, is allocating 54 million euros to support
customers and suppliers. This is in addition to 5
million euros recently donated to accelerate COVID-19 research in Spain.
More than 90 percent of
MAPFRE’s 34,000 employees worldwide are working remotely to reduce the
risk of contagion and to guarantee service to customers, who in Spain are being
offered a free advisory service to learn how they can take advantage of the
support that is on offer.
Tell
us how your company is contributing to the pandemic relief efforts: communications@iii.org.
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.
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.
U.S. insurers are meeting the challenges faced by their customers, communities, and employees amid the COVID-19 crisis, according to a fact sheet released April 3 by the Insurance Information Institute (Triple-I).
“The nation’s insurers continue to work actively on immediate and forward-looking solutions that will assist its customers and communities in recovering from COVID-19,” said Sean Kevelighan, CEO, Triple-I.
The fact sheet, Insurers Offer Forward-Looking Solutions for COVID-19 Recovery, outlines how the industry is easing its customers’ financial burdens, working with government to create a COVID-19 Recovery Fund, and making sure it has the resources to pay future claims from events such as hurricanes, tornadoes, and wildfires.
Immediate Customer
Solutions: Insurers are offering payment relief and extending coverage to
customers who are in financial distress while at the same time keeping its employees
on the job to serve these same customers, the Triple-I notes.
Government-Backed
Solutions: Trade groups representing insurers have voiced support for the
proposed COVID-19 Business and Employee Continuity and Recovery Fund. It
would be financed by the federal government and provide essential funds to
impacted employers and employees.
Facing Challenges Head-On: Workers
compensation insurers in multiple states are covering the healthcare workers
and first responders who face exposure to COVID-19 while auto, home, and
business insurers are setting aside the resources needed to pay the claims
arising out of future natural disasters even as insurer investment portfolios
have faced their own headwinds. A Triple-I non-resident scholar predicted
yesterday the likelihood of an ‘above-normal’ Atlantic hurricane
season.
Insurers have also contributed financially to food
banks and organizations providing medical supplies.
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.
While insurance policies might not cover the mitigation or
cleanup costs related to commercial facility exposure to the coronavirus, preserving
a healthy and safe place of business remains a critical risk management issue.
As the coronavirus (COVID-19) continues to spread rapidly around
the world, it’s important to know what to do if someone carrying the highly
contagious virus comes in contact with any of your facilities or those of your
customers. Even the potential of your business premises being exposed to
COVID-19 can create a possible need to engage risk mitigation efforts.
Understanding the importance of utilizing a professional, credentialed
decontamination contractor both before and after facility exposure is crucial
to protecting your business.
Larry Thomas
“COVID-19 has presented new challenges for businesses around the
world, and it’s necessary to understand the importance of ensuring the safety
of all employees and customers,” said Larry Thomas, global president of
Crawford Specialty Solutions, a division of Crawford & Company that
includes Contractor Connection. Contractor Connection, an industry
leader in managed repair services, provides insurance carriers, brokers and
consumers a global network of more than 6,000 contractors vetted and managed
for performance in residential and commercial work, including specialists in
technical areas like cleanup after a biological event.
“Experts have warned that we have just begun to feel the impact of the
virus in the U.S., and it is expected to continue to affect lives for the
foreseeable future.”
With that in mind, it’s essential you ensure you are
utilizing a decontamination contractor who is rigorously vetted, held to the
highest standards, and professionally equipped to restore affected sites
through proper remediation and containment procedures. Here are some best
practices for how to approach this critical work while reducing risk for you
and your customers.
Prevention protects you, your customers and others
Prevention is the first step toward reducing exposure to the
virus. Even before an incident occurs, a decontamination contractor can work
with your business to provide cleaning and disinfecting services designed to
reduce the opportunity for infection and keep facilities operating longer. When
administered by a trusted, licensed and insured provider, preventative cleaning
provides a cleaner, safer work environment and enhances employee and customer
satisfaction.
Decontamination services limit business interruption
If you or your customers’ facilities are exposed to
coronavirus, legitimate decontamination services using proper techniques,
equipment and materials, and following CDC, state and local protocols should be
employed to restore your places of business back to operation as quickly as
possible, limiting business interruption. Time is critical, so you should
engage with a service that provides 24/7 assignment processing and emergency
response.
Lance Malcolm
“Providing access to a rapid-response decontamination
service can help reduce the potential impact of contamination in the workplace
and return the environment to full operational status as quickly as possible,”
said Lance Malcolm, U.S. president of Contractor Connection. “The focus must be
on helping companies limit business interruptions and ensure that the affected
facilities are completely safe for those who use them.”
Safe biohazard waste disposal reduces future risk of
exposure
As part of decontamination services, it’s also important to
utilize contractors trained to handle and properly dispose of biohazard waste,
safely removing any affected materials from the facility. Services that provide
quality assurance review and project monitoring ensure speedy completion and
provide peace of mind knowing exposure to the virus has been properly reduced
or eliminated.
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.
