Tag Archives: pandemic

Perspective on the Pandemic

On March 2, the California Future of Work Commission released its final report. It includes the key findings and its recommendation for a new social compact for work and workers in California by 2030. When the commission began its work in 2019, the focus was on technological disruption of traditional employment. But, as the report notes, “The pandemic has amplified and accelerated existing trends and challenges, bringing many aspects of the future of work forward.” 

The report is must reading for all in the workers’ compensation community — even if the words “workers’ compensation” do not appear in it.

In its broadest sense, the report calls for specific steps to create a comprehensive, secure environment for workers. This environment includes material and physical security both at work and in society in general. As such, in the report’s 15 recommendations there are familiar themes of wage adequacy and, acknowledging the intervening COVID-19 pandemic, the need for a safe workplace. For example:

“Essential and front-line workers face both economic vulnerabilities and health and safety risks, and are disproportionately female and workers of color.”

“Front-line workers and workers who must be physically present to work must have support to enable them to stay home when sick, have access to appropriate protective equipment, and be ensured safe and sanitary workplaces.”

These, and the other recommendations in the report, are a catalogue of issues that have been confronting policymakers in city halls, state capitals and Washington, D.C., for the past decade. California is at the forefront of this debate, from local jurisdictions adopting hazard pay ordinances and challenging the “gig” economy, to the OSHA Standards Board implementing their COVID-19 Prevention Emergency Temporary Standard, to the many new employment-related state laws, including Assembly Bill 5 adopting the “ABC Test” for worker classification disputes. Much of what the commission identifies as a new social contract would seem to be resting on an existing – and expanding – foundation made in California.

We remain in the midst of the pandemic. While states and the federal government have eased many  restrictions on activities due to vaccinations and corresponding decreasing infection rates, the laws, regulations and executive orders emerging from this crisis create public policy issues extending well beyond reopening. One of the many challenges facing America in general, and California in particular, is defining what “normal” is to become. 

The infusion of massive amounts of public funds into businesses and to individuals makes a return to the status quo ante COVID virtually impossible. State and federal budgets contain trillions of dollars of expenditures to support economic recovery. It is unrealistic to expect individuals in low-paying essential critical infrastructure jobs to continue to participate fully in a “recovered” economy after losing supplemental paid sick leave and, in some cases, higher wages associated with working in a hazardous vocation. 

For employers and employees, the exigent circumstances that caused the creation of supplemental paid sick leave and hazard pay for essential workers should not be looked at in isolation. This is part of a bigger picture that began years ago with efforts to make a $15-per-hour minimum wage the law in all states and for the federal government and implicates the still highly unsettled world of worker classification. Yes, the long reach of the Dynamex decision extends to the post-COVID future of work. So, too, does the equally unsettled world of co-employment. And not just in California.

Whether Congress will pass the Protecting the Right to Organize (PRO) Act is certainly in doubt, at least as long as the filibuster exists in the Senate. But the president has said he will sign it if it gets to his desk. Among its many provisions is bringing the “ABC Test” of Dynamex to the entire country. 

What does this have to do with assessing the workers’ compensation long-term public policy effects of COVID-19? Quite a lot, actually. 

Policymakers cannot meet the objectives of the commission’s report, or the PRO Act, or any of  hundreds of other laws, regulations and ordinances if they reduce the discussion of workers’ compensation to a debate over what is presumed to be a work-related injury. Policymakers must identify how to integrate workers’ compensation programs into an overall commitment to worker security implicit in the commission’s work and similar endeavors across the country. While currently focused on COVID, this effort must extend well beyond the pandemic.

See also: Pandemic Reshapes Personal Lines Plans

Consider this excerpt from the pre-pandemic directive of the Obama administration, the Presidential Policy Directive — Critical Infrastructure Security and Resilience (PPD-21), released Feb. 12, 2013:

“Critical infrastructure must be secure and able to withstand and rapidly recover from all hazards. Achieving this will require integration with the national preparedness system across prevention, protection, mitigation, response and recovery.…The term ‘all hazards’ means a threat or an incident, natural or manmade, that warrants action to protect life, property, the environment and public health or safety, and to minimize disruptions of government, social or economic activities. It includes natural disasters, cyber incidents, industrial accidents, pandemics, acts of terrorism, sabotage and destructive criminal activity targeting critical infrastructure.”

For large businesses – including insurers – this process of prevention, protection, mitigation, response and recovery is the basis for enterprise risk management. For small businesses and entrepreneurs, developing a risk awareness and response program is more difficult. As COVID-19 has shown, when there is a threat to critical infrastructure, the risk to employees is not limited to the workplace. The commission report underscores that the scope of risk to workers during the pandemic is also more than to health, as employees in businesses, such as hospitality or restaurants, can attest given the high level of unemployment caused by stay-home orders and travel restrictions.

As we move forward, there needs to be a comprehensive effort to integrate the public and private institutional response to the next event placing critical infrastructure at risk. That effort involves all who will be expected to contribute to the resiliency and recovery of not only our essential critical infrastructure, but of the essential workers without whom no recovery can happen.

How Workplace Has Changed for Women

The COVID-19 pandemic had a devastating impact on businesses and workers worldwide. Companies had to adopt online business models to survive, which forced an unprecedented workforce migration as employees left their offices to work from their homes.  As the world starts to emerge from the pandemic, we’re beginning to understand the many effects of this economic and social upheaval on workers. New research shows that gender inequality, long a problem in the American workplace, worsened during COVID-19, and the insurance industry is no exception.

In March, Accenture surveyed 176 U.S. women in insurance to understand how the pandemic and the sudden shift to remote work affected them. We looked at the professional and personal effects this had on work-life balance and caregiving roles. At the same time, we surveyed 134 C-level insurance executives in North America to discover what the future of work looks like for their organizations. The results were both surprising and concerning and confirmed that the pandemic has had a significant impact on the well-being and productivity of women.

Key observations

The survey reiterated the long-standing conflict between women as workers and women as caregivers, but the numbers were still striking. Most of our respondents are working mothers, with six in ten (59%) having school-aged children at home, and 68% saying they are the main caregiver for children or elders in their households. More than half (56%) say they face increased pressure as the primary caregiver as they juggle childcare responsibilities due to school closures, while working longer hours because of record business activities.

Our results revealed that almost one in three (32%) women working in insurance left their jobs temporarily or permanently during the pandemic – a sobering statistic. When asked why they left, 21% said childcare/eldercare priorities were the main reason. Meanwhile, 30% of women who remained at their jobs during the pandemic are considering leaving.

Additionally, 45% of women in insurance feel they have lost opportunities to grow their careers during the pandemic. Similarly, 44% say the pandemic has adversely affected their career progression while 39% feel disconnected from or forgotten by their companies.

Employees vs employers

We uncovered a stark disconnect between employer and employee attitudes on a number of issues. This includes the level of support women receive from their companies, the expectations for their return to the office, and the post-COVID changes they expect before returning to work. These disconnects must be addressed, because COVID added even more caretaking responsibilities to women, and they are not going away.

See also: State of Diversity, Inclusion in Insurance

Consider the disconnect between corporate leadership and female employees in the number of days they are expected to work from the office. Nearly half (47%) of women surveyed believe they would lose advancement opportunities if not present in the office five days a week post-COVID, but only a quarter (26%) want to work in the office that much. More than a third (34%) want to work remotely full time, with the rest preferring a hybrid approach. By contrast, almost all (91%) executives would prefer employees to spend four to five days in the office post-COVID, and more than half (54%) believe their employees share that desire.

When women were asked how their employers can help, more than a third (39%) cited flexible scheduling, followed by increased paid leave (24%). This appears to be an area of progress for insurance firms, with 43% of women surveyed saying their employer is trying to offer more flexible scheduling. 

A permanent culture shift

So, what does this information tell us, and what should insurers take note of, as many look to return their workforces to offices in the coming months?

First, remote working is here to stay, so companies must embrace this new model to support women and their needs, or risk losing them along with their years of experience, institutional knowledge, and dedication.

Next, in order to accommodate the remote or hybrid workforce of the future, companies will need to engage in a deliberate cultural change, one that ensures “remote” does not mean “less effective,” and that remote workers are not penalized for missing out on traditional in-person interactions, like the conversation over a cup of coffee or the face-to-face mentoring session. They will need to create return-to-office strategies that promote flexibility for women who need to juggle additional responsibilities outside of the workplace.

Finally, if firms incorporate flexibility in their return-to-office strategies, it may help prevent women from leaving the workforce in the future and persuade women who did leave to return.

What insurers and other financial institutions do next will have a major impact on the future of women in insurance, from entry-level workers all the way to the C-suite.

Where Does Life Insurance Go Now?

In 2020, people flocked to purchase life insurance amid the looming fear and uncertainty brought by COVID-19. None of us had experienced a global health crisis like this, and, when mortality is at risk, the demand for security increases. 

While life insurance policy sales increased 2% overall in 2020, other indicators showed just how much life insurance was brought to the forefront once again, following a decline in policies sold over the decade prior. CNBC reported a 50% spike in Google search traffic for “life insurance” between March and May 2020, while leading carrier Northwestern Mutual saw a 15% increase in policies sold between April and September compared with the year prior. On the annuity side, sales were up $58.6 billion from 2019. 

You’d think these numbers would be a good thing for insurance companies and agents, but that wasn’t necessarily the case. The massive influx in applications caused insurance carriers to become increasingly bogged down; applications that once took one to two weeks to review and process were suddenly taking over one month. And thresholds for coverage became even more challenging to meet, with many premier carriers only insuring people if they met a $750,000 coverage threshold. This continues to be the case today for many major carriers. 

Luckily, simplified-issue insurance let people who are generally healthy just answer a handful of questions. And, with instant-decision life insurance, many people didn’t have to get a medical exam to enroll in a policy, and a decision was made in two minutes as to whether a carrier will cover that person. Insurance companies have also found easier ways to do underwriting or attending physician reports, which are essentially a doctor’s official response regarding a patient’s current state of health and health history. 

And yet, as the demand increased and both simplified-issue and instant-decision insurance became more prevalent, so did the need for efficient, user-friendly digital insurance quoting and sales platforms. But our industry just hasn’t kept up with the times. It has been using the same antiquated application process for decades. 

On the consumer side, the process of applying for life insurance required a 15-page application, doctor’s appointment and various other qualifying factors and steps (if the person doesn’t qualify for instant decision). And, the person would be on the receiving end of many broker marketing calls, and have to pick from 20 companies on the basis of pricing and insurability.

Now, as people’s health and desire for financial security have been in jeopardy, there’s been a needed shift in how we go about buying and selling life insurance. For instance, our platform, Quote & Apply, supports agents in making the transition to digital as seamless as possible. A person can go through our entire application in under five minutes and be quoted a policy (with several coverage options dependent on the person’s unique history) right on the spot. There are just six questions (age, gender, height, weight, smoking history and a rating of general health). Insurance companies can directly contact the medical information bureau and a person’s doctor through a health portal and make instant decisions while offering numerous policy options. 

See also: Why to Provide Life Insurance for Workers

The implications of COVID-19 spurred this heightened awareness of the importance of life insurance, and I believe that it’s every agent’s fiduciary duty to offer these policies to their clients. Life insurance gets people through the most challenging times of their lives.

We’re not going back to where we were as an industry, even post-pandemic. COVID-19 put a microscope on the issue of our mortality and how life insurance can provide an essential layer of security for people everywhere. COVID simply crystallized the demand for digital wholesale life insurance solutions.

Between the shift to a remote workforce, and the pandemic itself, we had no choice but to evolve; and we now have a chance to create widespread life insurance literacy through this experience.

Pandemic’s Lessons for Auto Insurers

It’s impossible to deny the profound impact that the pandemic has had on every person and every business, and the U.S. automotive insurance industry was no exception. Previously mundane errands such as a trip to the grocery store became a battle for survival — and toilet paper — and once-gridlocked highways were replaced with barren stretches of asphalt. 

On a more serious level, the global health crisis sent shockwaves of financial uncertainty across the nation that was also addressing considerable emergencies on both the civil and environmental fronts. 2020 quickly cemented itself as a year for the record books, and not for good reasons. 

However, as tough as COVID-19 has been, there are hidden lessons in connecting and analyzing what would otherwise have been viewed as dissociated events. And when compared with years past, the auto insurance industry can turn these pandemic-led transformations into actionable insights for the industry to evolve and adapt to meet future disruptive events. Our recent Auto Insurance Trends Report focused on analyzing the “new normal” of consumer behavior, which has a direct correlation to critical carrier-related factors such as underwriting, claims and those actively participating in telematics exchanges or usage-based insurance programs. 

Here’s what we found:

Empty Roadways Bring Out Lead-Footed Drivers 

When looking at the initial timeline of the pandemic, the sweeping stay-at-home mandates and shutdown orders across the country created a drop in miles driven of over 40% from March to April 2020. Even normalized mileage hovered between 83% and 88% of 2019 levels for the second half of the 2020 calendar year.

The empty roadways, particularly at the beginning of the pandemic, enticed many lead foot drivers, who took the opportunity to turn highways into personal drag strips. The first spike in elevated speeding rates occurred around mid-March of 2020 and remained 110% of 2019 data recordings for much of the remainder of the year. With those open roadways, drivers favored their accelerators over their brakes, resulting in a drop in hard braking instances during that same observed period. 

See also: How Insurtech Thrived in the Pandemic

Gen-Z Drives DUI Trends 

As part of our generational data insights, where we examined driving behavior across multiple age brackets, we discovered a particularly troublesome trend among our nation’s youngest drivers, Gen Z. 

Classified as ages 22 and under, Gen Z drivers ranked the highest when observing violation data across DUI infractions, overtaking those in the Traditionalist age group (ages 76-plus) who were the highest offender the year prior. While restaurant and bar closures led to a potential overall reduction in total figures, the months of April and May 2020 indicated an approximate 50% increase of DUIs among Gen Z drivers. 

Collisions and Claims Down, Severity on the Rise

When looking at the onset of the pandemic in 2020, much like the reduction in total miles driven, the volume of collisions and subsequent claims experienced considerable drops. With a 19% drop compared with 2019, one of the emerging trends throughout the entire year and particularly heightened in October was the inverse relationship between lowered claims figures and increased bodily injury. Comparing the months year-over-year, 2019 saw 7.1% growth in severity, while, in 2020, that figure rose to 12.7% despite the fewer miles driven. 

Naturally, the onset and continuation of a global pandemic will profoundly influence consumer behavior, including driving patterns, creating new challenges for the businesses that are so closely related to such behavior. However, from those challenges, pandemic-led transformations such as enhancing virtual claims capabilities have shown how the industry can adapt and improve. 

Adapting to Tackle Future Disruption 

While telematics has been around for years, 2020 and the pandemic brought a new sense of urgency to better understanding driving behavior. For insurance carriers, leveraging telematics and deploying usage-based insurance programs provides an incredible solution to accommodate changing driving behaviors. By way of stronger analytics and timely data reporting capabilities, telematics programs assist in taking the guesswork out of how to accurately calculate the risk propensity of an individual. 

As drivers continue to show interest in pay-per-mile programs as part of fluctuating driving patterns, telematics and usage-based insurance (UBI) programs give consenting consumers the opportunity to be priced more accurately than a traditional risk pool would dictate. This can increase customer satisfaction and allow an insurance carrier to be a competitive differentiator with a way to stay ahead of the curve of future disruptive events. 

The same can be said for almost all data or analysis during this strange but insight-full period of history. Understanding the motivations and connections between such events and human behavior will highlight both vulnerabilities and opportunities to grow. The pandemic will continue to affect virtually every market imaginable, not just now but for months and potentially years to come. The important aspect to consider is how to best adapt and evolve for the road ahead.

How Insurtech Thrived in the Pandemic

The past year has provided unexpected challenges and opportunities across all areas of the insurance industry because of the COVID-19 pandemic. As businesses were forced into lockdown, many carriers wondered how they would fare, because collaborative office environments and in-person meetings are crucial to delivering quality insurance service. However, through the adoption of insurtech solutions over the course of the year, insurance companies learned to adapt to remote work without sacrificing efficiency, productivity and collaboration.

By using virtual platforms that incorporate the kinds of features and tools demanded by the reality of working remotely during a pandemic, the insurance industry has learned to benefit from increased global access and collaboration. The normalization of digital platforms and tools has increased the interest of digitizing the entire insurance industry, accelerating efforts. Having seen their effectiveness in action over the past year, carriers are seeking out more insurtech partnerships than they would have previously. 

Similarly, technology companies are increasingly developing insurtech solutions that improve the customer experience while also introducing new advantages. “The tech community has had time in last couple of years to understand what insurtech is and is now starting to approach [the insurance industry] with ideas that aren’t about customer engagement; they’re about new risk spaces or entirely new verticals, or they’re about reducing risk in the first place,” said Stephen Brittain, director and co-founder of Insurtech Gateway, at Insurance Innovators USA. The current environment brought about by COVID-19 has served as a catalyst for insurtech innovation. The insurance industry is likely to focus on insurtech strategy and partnerships well beyond the pandemic.

Digital claims management

Previously, insurance carriers looked to partner with technology providers to help streamline internal business processes. However, there has been a growing focus on how technology can help insurers deliver customer-centricity. In many cases, the accelerated adoption of new technology by insurance carriers has facilitated remote processes for both insurance adjusters and customers. Due to the pandemic, 90% of insurance claims are now processed virtually. Insurtech software simplifies this process, allowing customers to upload relevant information and photos of their property or auto claim and providing adjudicators with augmented reality (AR) and virtual reality (VR) tools to corroborate claims and increase accuracy and efficiency when analyzing damage off-site. 

Additionally, the digitization of claims management allows carriers to use artificial intelligence (AI) capabilities to identify and prevent fraud. With more customer and claims data available, insurers can leverage AI algorithms to compare similar losses for discrepancies and develop systematic business practices that save time and money. 

Customer-centricity

While digitization can help carriers automate processes, it also primes customer’s high expectations of immediate service. The insurance industry is hyper-focused on the customer experience and delivering consistent service. Insurtech solutions enable transparent customer communication and user-friendly platforms, including comprehensive consumer portals and touchless claims capabilities. Insurance carriers that expand collaborations with insurtech providers are more likely to produce exceptional customer engagement and are better suited for growth as the legacy industry adopts the digital platforms found at the foundation of these new insurtech systems. 

See also: Role of Underwriter in Age of Insurtech

The digitization of the industry allows insurers to craft an end-to-end experience for the customer, tailoring seamless digital and virtual processes to their personal needs through integrated insurtech platforms. Carriers can provide real-time status updates and improve productivity of field adjusters through mobile applications and optimized scheduling features, completely automating processes for increased efficiency. 

The future of insurtech

This past year has been a time of impressive innovation throughout many business sectors. While many argue that insurance is becoming less visible to its consumers, insurtech providers are imagining new ways to rebrand the industry and reinvent the market. The integration of insurtech tools provides a positive spin on the industry as it progresses with technology and the user experience in mind. Big insurance companies and brokers often look to gain efficiency from new partnerships, seeking collaborators who can bring about new distribution, enhanced customer experience and novel insurance solutions.

Today, technology innovators outside of the insurance ecosystem are providing valuable insight and producing structural changes with tools crafted to drive insurance goals through data-driven insights that inform evolving business practices. Insurance carriers play a big role in helping insurtech startups thrive after this past turbulent year. These companies are building a road map for a new view of insurance.

“It is really difficult for carriers to reimagine the industry,” says Peggy Klingel, director of startup engagement for Allstate Insurance. “It is important that we support startups because we need the insurtech ecosystem to bring their invaluable perspective on the industry and where it can be improved.”

Providers can benefit from the insurtech ecosystem by investing time, providing feedback and professional mentorship, as well as capital so that innovation can thrive. In return, well-supported technology startups can craft comprehensive solutions that align with insurance carriers’ policy and claims processes to deliver a valuable, fully integrated system to the end user.