‘The insurable world will continue to grow’ says Gallagher Bassett’s UK chief client officer

More insurance policies and products will be launched as a result of the Covid-19 pandemic, potentially including standalone business interruption (BI) cover, says Peter Diskin, chief client officer in the UK for claims service provider Gallagher Bassett.

As a result of the coronavirus crisis, Diskin believes that “the insurable world will continue to grow” and that “we will see more policies on the market than we’ll see less”, especially in sectors such as travel.

He explains: “You may see insurers that have not been affected by this, that didn’t offer any pandemic cover, see this as an opportunity or a gap in the market, or a market in the gap, to come in and specifically write tailored products for pandemics.

”Standalone business interruption policies may come back as well.”

Furthermore, brokers will be required to help policyholders navigate this new “insurable market”.

Diskin continues: “Brokers [will be] asked to seek [business interruption] coverage on behalf of policyholders to ensure that they’ve got adequate protection in place for pandemics and that will be an insurable market.”

Covid claims impact

When Covid-19 first hit, Diskin tracked changes in the motor and casualty markets.

He says: “We saw the immediate impact on claims volumes in sectors such as motor and casualty and namely, when the traffic came off the road under government guidelines to stay home, the claim volumes dropped immediately.

”So too when the footfall didn’t go through restaurants, pubs, clubs, hotels, gyms and leisure centres, we weren’t getting the liability claims that were emanating out of those facilities.

“But that was counterbalanced with travel cancellations and curtailment claims, insolvency of operators generating large insurance claims and then the rise of business interruption claims despite the [test] case itself, irrespective of that, we saw a major increase in the claims that were actually launched and nominated against those insurers.”

As the pandemic continues, Diskin notes that he is now “starting to see the very start of an increase in employment liability claims”.

“They’re starting to come from people who believe they’ve contracted Covid as a result of continuing employment in front line services and, second to that, we’ll start to see some employment liability claims for people who have had to work from home in difficult conditions over an extended period, whether that results in physical injury or mental anguish, we expect those employment liability claims to continue,” he adds.

A further trend is linked to insolvencies, Diskin continues.

“Sitting underneath all [current claims trends] is really the ability for customers at a policyholder level to continue trading and we’ve had a couple of large projects where an organisation has become insolvent and there are respected policies in place to support its customer base, mainly in the travel, cancellation arena,” he says.

“Gallagher Bassett has stepped in to support the liquidators of the carriers in that scenario to try pay claims in a speedy response. I think we’ll see more of that continue unfortunately.”

Internal innovation

On a more positive note, the pandemic has proved to be a fertile time for internal innovation, as firms use this quieter business period to create efficiencies in their processes.

Diskin explains: “What’s happened since Covid is businesses have had a chance to be able to re-evaluate processes, in particular with a view to see what necessary expertise they need to hold in the business.

“I think we’ll see large innovations or really good sized innovations come from the fact that whilst the world’s been in disarray, businesses have had the opportunity to sit back and re-engineer or review their processes to create constant innovation, which then supports the downwards pressure on costs, whether you’re a carrier or a policyholder looking for your claim to be paid.”