While 2020 brought a huge amount of turmoil and change, by far the biggest news of the year was the COVID-19 pandemic. The virus has brought the world to its knees, shutting down businesses, closing international borders, sending people indoors, and killing more than two million people so far. Every aspect of our lives have been touched by this pandemic, and the insurance industry is no different.

Last year, insurers saw more claims than ever before across the entire industry. Read on to learn how the latest UK COVID news has changed the insurance industry for good. 

Business Interruption Claims 

One of the biggest claims we’ve seen a rise in 2020 is business interruption claims. These policies cover a business in case some unforeseen circumstances force the business to close for a short period of time. But during the pandemic, thousands of businesses have been forced to close during lockdowns, sometimes for months on end.

Recently, the Supreme Court ruled on a case in which the FCA was suing insurers for denying these claims. Insurers said that the pandemic was not a part of the policy coverage.

The Court ruled on the side of the FCA, saying insurers had to pay out those claims. This is likely to be a landmark case in insurance history, as insurers will have to start being much more exact with what their policies do and don’t cover. 

Increased Indemnity Costs

It will come as no surprise that indemnity policy costs have increased exponentially during the pandemic. These policies traditionally help to cover the things health insurance won’t, such as co-pays, deductibles, and the like. The claims for these policies during normal times are low. 

But in the face of the pandemic, millions of people are facing medical expenses they weren’t expecting. A huge number of people with indemnity policies are now filing claims, and many insurers aren’t prepared to deal with the high costs. Although the emerging vaccines should slow down these claims, it will still be months or years before all these cases are settled. 

Enterprise Act

Another factor putting additional pressure onto insurers this year is a law that was passed more than four years ago now. The Enterprise Act of 2016 requires that insurers issue payment for claims in a prompt manner. If they fail to do so, policyholders can start claiming damages for delayed payments.

Before 2020, this policy was little more than a way to hold insurers accountable and make sure processes didn’t get needlessly delayed.

But with the enormous increase in claims in the last year, it’s now putting serious pressure on insurance companies. They’re handling more claims than ever before. And if they fail to make payment in a certain time frame, they could face additional financial penalties.

Supply Chain Issues

We’ve all seen the effects of supply chain issues during the COVID-19 pandemic. As the country has gone into lockdown, manufacturers and delivery companies have been forced to slow down operations. This has resulted in empty shelves, shortages of essential supplies, and long lines at grocery stores. 

Insurers have found themselves reevaluating the ways they assess risk this year. We’ve discovered our supply chain is much more fragile than we thought and doesn’t have much of a backup plan. Insurers and companies alike have had to figure out new ways to support the supply chain and keep industry running smoothly.

More Complaints

Everyone this year has received more complaints than ever before, from grocery store clerks to top-level insurers. The pandemic has created hardships in every single industry, and customers’ stress levels are at an all-time high. People have less patience for inconveniences and are having to deal with more of it than they have in the past.

Unfortunately, these complaints have a more serious impact than just ruining someone’s day. Employees who are now dealing with more frequent abuse from customers are losing morale and becoming burned out. This is also damaging the relationship between insurers and customers.

Changes in Liability Claims 

We’ve also seen the way that businesses handle liability concerns change this year. In the past, workplace liability prevention has been a matter of making a workplace safe. But this year, as many of us have retreated to our homes to work, liability claims have changed. 

Employees working from home may not have access to ergonomic setups or the kind of safety measures they do at the office. If an employee gets injured at home during business activities, who bears responsibility? And in addition to work from home liability, employers may also face liability claims if their employees caught COVID in the workplace.

More Travel Insurance Claims 

With national and international lockdowns happening all over, many people have had to cancel travel plans. Flights have been grounded, international borders are closed, and business conferences and events are cancelled. People are filing travel insurance claims for the trips they’ve had to delay or cancel entirely.

Under normal circumstances, travel insurance claims are relatively rare. How often does a person fall ill or have some sort of other emergency just before or during a trip? But the travel insurance industry has been snowed under with claims during the last year. 

Find the Latest UK COVID News

The COVID-19 pandemic has impacted every area of our lives, from how we work to how we protect clients. We’ve seen increases in indemnity claims, supply chain claims, business interruption claims, travel insurance claims, and more. In the coming years, we’re likely to see the entire insurance industry undergo a radical shift in how we approach risk management in an ever-more-dangerous world.

If you’d like to find the latest UK COVID news, check out the rest of our site at Gallagher Basset. We guide, guard, and go beyond in protecting you and your business. Check out our COVID-19 resource centre today and start discovering what the future of insurance might look like for you.