Tag Archives: COVID-19 p/c insurance impact
Insurers Respond to COVID-19 (4/17/2020)
Auto insurance refunds
U.S. auto insurers will return more than $10 billion to their customers nationwide, according to an estimate released on April 11 by the Insurance Information Institute (Triple-I).
We’ve listed many of the companies that are offering refunds in a previous post. This week, several other auto insurers have announced refunds or credits. This is not an exhaustive list, so be sure to check with your insurer to see if they are offering refunds or credits. All premium and rate adjustments are subject to regulatory approval.
Chubb‘s auto insurance clients will receive a credit reflecting a 35% premium reduction for the months of April and May, with additional discounts for subsequent months, as the situation warrants, upon renewal. Across Chubb’s portfolio, the average credit is expected to be $110 per vehicle.
COUNTRY Financial announced that every client with a personal auto insurance policy as of April 1, 2020 will receive a 15% refund for two months of auto premium in anticipation of a decrease in driving activity in April and May.
CSAA Insurance Group is giving a 20 percent refund for two months of auto premiums, March and April 2020.
ERIE has announced that lowering personal and commercial auto rates would be the best option for providing additional relief to customers. The company estimates the total rate reduction impact to be approximately $200 million throughout the 12 states and District of Columbia where ERIE operates.
Ohio Mutual Insurance Group is offering personal auto premium credits on more than 80,000 personal auto policies for an estimated total of $6 million. Ohio Mutual is voluntarily providing a 25% personal auto premium credit that applies to an 11-week period (March 16 – May 31, 2020) for all policies in-force on May 31. Credits will be automatically applied to customers’ first invoice after June 1. Those with a balance less than the credit will receive a refund by check.
The Hanover Insurance Group announced it has created The Hanover CARES Refund, through which the company will return 15% of April and May auto premiums to its eligible personal lines customers, providing financial relief during the coronavirus pandemic.
MAPFRE Insurance announced its Staying Home Refund program, which will return 15 percent of April and May premium to its voluntary personal auto policyholders in Massachusetts, totaling over $30 million. On average, most policyholders will receive a credit of approximately $40.00. A similar credit will be provided to the company’s personal auto policyholders in its other states of operation for the same time period.
Westfield announced a 15 percent policy credit to their eligible personal auto insurance customers for three months.
Supporting communities
Chubb has announced a support program designed to help ease the financial burden of the COVID-19 pandemic on its small business clients in the United States and provide direct support to healthcare workers and other front-line responders.
Chubb’s U.S. small business clients whose policies renew between April 1 and August 1, 2020 will receive an automatic 25% reduction in the sales and payroll exposures used to calculate their premium as well as a 15% reduction in premiums for their commercial auto insurance. In addition, Chubb will purchase $1 million in gift cards from small business clients around the country, which will be donated to healthcare workers and other first responders on the front lines of the pandemic in their communities.
Fundación MAPFRE, a global nonprofit foundation created by MAPFRE, announced it will donate $2.3 million to support urgent medical and community needs across Massachusetts, as the coronavirus continues to spread. The funding is part of a global $38 million aid package by the foundation for medical providers and communities around the world.
Hanover announced customer relief measures and a commitment to contribute $500,000 to nonprofits in local communities to address needs arising from the public health crisis.
State Farm has donated $1 million and partnered with Salesforce to provide one million masks and other protective equipment to healthcare workers in areas of urgent need identified by FEMA (Federal Emergency Management Agency). Since the start of COVID-19, State Farm has provided about $5 million in neighborhood relief across the country.
Swiss Re Group pledged to donate CHF 5 million to support the needs of people and communities affected by the COVID-19 pandemic around the world. Through its non-profit grant foundation, the Swiss Re Foundation, the funds will be distributed to organizations tackling the crisis, particularly in developing countries.
The Westfield Insurance Foundation is helping communities in Northeast Ohio and across the country by donating nearly $1.5 million dollars to nonprofit partners focused on family stability and disaster recovery. These dollars will help stabilize communities and help those who need economic support.
Putting Car Insurance Prices Into Perspective
As car insurers help their customers cope with the pandemic’s economic impact through premium refunds and other relief measures and some groups complain the efforts are insufficient and ask regulators to make insurers pay more, it’s worth noting that the cost of insuring motor vehicles has grown more slowly than inflation over the past 12 months and well below prices for hospital services and car repairs – two key drivers of car insurance claims.
As the chart below shows, year-over-year increases in auto insurance prices have trailed growth in the Consumer Price Index, the most widely used measure of inflation.
“Auto premiums are kept relatively low by competition among insurers,” explained Triple-I chief economist Steve Weisbart. “This has been happening even as two major contributors to claims have grown much faster. In the case of hospital services, prices have not just been rising – growth has been accelerating since last July.”
You read that right. Even as two of the biggest contributors to claims – the money insurers pay policyholders after accidents – have grown faster than inflation, the prices policyholders pay for coverage have grown more slowly than consumer prices generally.
Many factors come into play when an insurer determines an individual’s premium payment – age, driving record, where and how far one generally drives, and much more; and, let’s face it, no one likes to pay for insurance or to see their payments go up.
But think about it: even though you might roll the dice if your state didn’t require you to have insurance, would that really be a wise move? Would you really want to be on the hook for the full cost of damage to your car or that of another driver? Or for the liability associated with someone’s injury or death?
That premium payment provides an awful lot of value in terms of peace of mind – IF you think about it. And, if you think further about it, you have more control over how much you pay for car insurance than you do over other products and services. You can shop around. You can change how much or what type of coverage you buy. You can bundle auto with other coverages. You can get fewer tickets and improve how you handle your credit.
And as usage-based insurance, powered by telematics, gains traction, your options will only increase.
Compare this with, say, cable and satellite TV. Your ability to shop around is quite limited (though improving with each new streaming opportunity that comes online). The products you really want come bundled with others you would never pay for if you had a choice.
And the prices of these services, as the chart below shows, continue to grow at rates well above both CPI and car insurance.
CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/16/2020)
CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/15/2020)
CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/14/2020)
CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/13/2020)
Insurers Respond to COVID-19 Wrap-Up (4/10/2020)
Auto insurance refunds
Auto insurers are giving refunds to their customers as people are driving less due to coronavirus shut-downs. No action is required by customers to receive credit in most cases, but Sean Kevelighan, Triple-I CEO, urged customer to reach out to their insurers. “We always recommend the customer contact the insurer and explain their individual situations. Insurers are always happy to look at individual situations and work with the customer,” he said in a Weather Channel interview.
Here are the refunds some of the major auto insurers are offering:
Allstate customers will get “Shelter-In Place Paybacks,” adding up to $600 million over the next two months. “This is fair because less driving means fewer accidents,” Tom Wilson, the company’s chair, president and chief executive officer said in a statement.
American Family will return approximately $200 million to its auto insurance customers.
Farmers auto customers will receive a 25 percent reduction in their April premiums. “We are committed to helping customers during this unprecedented time,” said Jeff Dailey, the company’s CEO. “As we continue receiving updated information in the coming weeks, we’ll assess additional ways to take care of our customers.”
The Hanover Insurance Group will return 15% of April and May auto premiums to its eligible personal lines customers. The company also announced additional customer relief measures and a commitment to contribute $500,000 to nonprofits in local communities to address needs arising from the public health crisis.
The Hartford announced its COVID-19 Personal Auto Payback Plan, which will provide customers with a 15 percent refund on their April and May personal auto insurance premiums. Over the next two months, the company will distribute approximately $50 million to its customers.
Liberty Mutual will return approximately $250 million to customers. Personal auto insurance customers will receive a 15 percent refund on two months of their auto premium.
MetLife Auto & Home customers will receive a 15% credit for April and May based on their monthly premiums. The company is also extending coverage under all personal auto insurance programs at no additional charge while customers are making deliveries in response to the crisis, effective March 20, 2020, through May 1, 2020. Additionally, MetLife Auto & Home is offering identity protection coverage to its customers.
Nationwide is giving a one-time premium refund of $50 per policy for personal auto policies active as of March 31, 2020.
State Farm announced an up to a $2 billion dividend that will go to its auto insurance customers. Customers do not need to take any action to receive this dividend, which will appear as a credit on their auto policy. On average, State Farm Mutual auto customers can expect to receive a credit of about 25 percent of premium for the time period March 20 through May 31; exact percentages will vary by state.
The Travelers Companies is giving U.S. personal auto insurance customers a 15 percent credit on their April and May premiums. Travelers will continue to assess the program as more information comes to light about the impact of the COVID-19 crisis on the driving environment and auto claims.
USAA is set to return $520 million to its members for driving less during the COVID-19 shelter-in-place orders. The company said in a statement that the payment is a result of data showing members driving less during the “Stay Home, Work Safe” orders across the country.
IICF’s Children’s Relief Fund
The Insurance Industry Charitable Foundation (IICF) has launched a national industry-wide fundraising campaign to benefit vulnerable children. Funds raised through the COVID-19 Crisis: IICF Children’s Relief Fund will help support children at risk of food insecurity, educational disruption, family homelessness and other circumstances exacerbated by the crisis. To make a donation and support children in need, please contribute here.
The Allstate Foundation
The Allstate Foundation together with Allstate employees and agency force members, will donate resources across the nation to support communities during the COVID-19 crisis.
The Foundation is contributing $5 million to accelerate relief and recovery for domestic violence victims, youth in need, first responders and communities at large.
“It’s incredibly inspiring to see people finding ways to take care of each other,” said Elizabeth Brady, Allstate chief marketing, customer and communications officer and trustee of The Allstate Foundation. “For 68 years, The Allstate Foundation has delivered on Allstate’s promise to serve as the Good Hands – especially in a moment of need.”
The Nationwide Foundation
The Nationwide Foundation is making $5 million in contributions to local and national charities to support medical and economic response efforts.
“As communities experience impacts related to the pandemic, many non-profit organizations stand on the front lines, providing basic necessities, wellness services and support to those in need,” said Nationwide CEO and Nationwide Foundation Chairman Kirt Walker. “Finances, staffs, programs and resources are being stretched as these non-profits not only serve their communities but feel the impact themselves. During these challenging times, we each have a responsibility, when we can, to lift those around us.”
Coronavirus Wrap-up: Property and Casualty (4/9/2020)
Coronavirus Wrap-up: Property and Casualty (4/8/2020)
An article in Claims Journal: Anticipated Coronavirus Claims Scenarios Across Major Coverage Lines discusses the wide range of insurance lines in which claims could rise, whether as a direct result of the pandemic or of social, institutional, and governmental reactions to it.
The Financial Times reports on two shareholder lawsuits relating to coronavirus that have already been launched in the United States, one against Norwegian Cruise Lines, the other against a pharmaceutical company called Inovio.
And, in a new publication, Allianz Global Corporate and Specialty (AGCS), Coronavirus: Safety Measures for Businesses Forced to Temporarily Close Their Premises, AGCS experts provide an overview of general security and prevention measures to help avoid physical damages.
An NBC6 (Miami) report highlights actions that some major insurers are taking to provide relief to their customers who are facing financial difficulties due to the coronavirus pandemic. Said Sean Kevelighan, CEO of Triple-I, “In the insurance community, we refer to ourselves often as financial first responders and you’re really starting to see that kick in right now.” Some companies are allowing customers to delay payments without penalties or initiate a personal payment plan. A few are offering relief in the form of paybacks to customers.
Other recent articles related to coronavirus from a property and casualty insurance perspective:
Auto
A New York Daily News article describes the rebates auto Insurers are offering to their customers due to coronavirus-induced driving lull. Liberty Mutual, American Family and Allstate are among the companies offering refunds.
Triple-I’s CEO Sean Kevelighan was quoted in a Los Angeles Times column and appeared in a Miami NBC affiliate segment about economic relief for drivers.
A Winknews report discusses the assistance available to customers during the coronavirus pandemic and includes an anecdote from a policyholder who was told by his insurer that he couldn’t get an extension. Triple-I’s Mark Friedlander says this customer’s experience is not the norm.
Business Interruption
Triple-I CEO Sean Kevelighan was quoted in Washington Examiner and Santa Rosa, Calif. Press Democrat articles on business interruption coverage.
Artemis published this interview with PCS’s Tom Johansmeyer on silent pandemic risk.
The Financial Times reported on the growing controversy over how much companies can claim from their business interruption insurance policies related to the coronavirus pandemic.
Cyberrisk
Cyber Perspectives on Coronavirus – Audio panel on the PLUS Blog
The National Insurance Crime Bureau (NICB) and the Cybercrime Support Network (CSN) announced they are partnering to educate online users about scams surrounding COVID-19, and what consumers need to watch out for when surfing the web, working online, or e-learning from home. NICB and Cybercrime Support Network Partner to Warn the Public About COVID-19 Scams
Additional resources:
- Cybercrime Support Network Scam Alerts
- NICB ID Theft Brochure
- ID Theft Infographic
- FraudSupport.org
- FBI Urges Vigilance During COVID-19 Pandemic
- FTC: Coronavirus Scams
Flood
As local, state and federal agencies scramble to react to the public health needs of COVID-19, cities and towns must also keep one eye on the weather forecast and river levels, according to this Chicago Tribune article.
Workers Compensation
The Minnesota Legislature passed a workers’ compensation bill Tuesday to cover first responders, health care workers and daycare workers. The legislation is effective April 8 and is in place until May 1. Minnesota to Ensure Workers Comp to Responders With COVID-19
Triple-I’s Daily newsletter covered many of the preceding stories this morning. To subscribe to the Triple-I Daily contact daily@iii.org.