At the end of 2019, insurance executives were polled to find out what most concerned them in 2020. The list is almost comical to read now under the current circumstances. The number one concern was cybersecurity, followed by disruptive technologies. The rest of the list is full of the typical concerns: interest rates, competitive markets, and government intervention. Towards the bottom of the list was climate change or natural disasters. It is ironic to see that it was technology and other futuristic changes that most worried the insurance world in 2019.
Now in 2020, in the middle of a worldwide pandemic and national quarantine, such concerns almost seem trivial. It was not a futuristic challenge that rocked the insurance world, but something as ancient and unusual as a plague. This has brought catastrophic downturns to every facet of the economy, and the insurance business has not been spared.
No Way to Right the Ship
Industry experts are saying that the COVID-19 crisis is going to be the costliest disaster the insurance world has ever faced. Insurance providers are set to lose perhaps hundreds of billions of dollars in 2020. Because the Quarantine has affected every area of the economy, no area of coverage has been spared.
Health insurance is being rocked by the virus, business insurance is facing claims by just about every client, and auto insurers are offering refunds and other forms of relief. State and federal governments have intervened in the U.S. and around the world to mandate payouts from insurers. If, for example, every business interruption insurance policy is forced to pay, the situation could only get worse.
The auto industry is under pressure as well, with California leading the way in mandating relief. There is simply no way short of a miracle that the insurance business can come out of 2020 with anything other than major losses and the possibility of significant changes.
Hope in the Face of the Numbers
Despite all of this, however, morale among insurance agents remains high. In a recent poll, more than half of respondents reported high morale, with just under forty percent reporting average mood. While those polled admit that they are facing a lot of challenges, especially for business interruption insurance, and new business essentially dried up, they are in surprisingly good spirits. Some acknowledge that they probably have not experienced the major drop-offs that are expected, so this could change. But it is good to know that there remains optimism in the middle of a crisis, especially in an industry that has perhaps its toughest days in history still ahead of it.