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Top of Mind: Challenges & Future Opportunities in Insurance in the Era of COVID-19, according to Lecturer Ken Radigan

We continue our Top of Mind series by featuring lecturer Ken Radigan, CEO of Professional Risk Managers International Association (PRMIA). The Top of Mind series is an exploration of the COVID-19 pandemic’s current and projected implications for the insurance industry. Developed by Academic Director Teresa Chan, the series presents insight on this topic from lecturers of the M.S. in Insurance Management program.

Here, we'll hear thoughts from M.S. in Insurance Management lecturer Ken Radigan about the ways in which businesses will need to adapt to the consequential volatilities of COVID- 19.

What are the short and/ or long-term effects of this pandemic on each of the key operational divisions within insurance companies, intermediaries and reinsurers?

Like other companies, the insurance and reinsurance industries will be facing the same short-term risk management changes that other companies are facing. They will need to implement their business interruption plans to see how they will be able to operate efficiently and effectively when most people are working remotely from their homes. They’ll have  to review their cyber security plans to ensure that they have the proper protections in a virtual world. Insurance and reinsurance industries must ensure that they have the proper health and safety procedures in place to accommodate the workforce as it returns to the office. Monitoring liquidity and market exposure as we make our way through a volatile stock and bond market will also be high priority.  Last, but not least, these industries must analyze the potential impacts that a long-term recession may have on its operating results. Each of these events will be challenging for any company to go through.  However, the insurance and reinsurance industries will have the added burden of having to deal with the claims that have been triggered by this virus as well.

Long-term, the insurance and reinsurance industries will play a vital role in addressing the economic and health concerns of the next pandemic. They will help to answer the question of, what can we as a society do to ensure that we have the financial resources to address this if it were to happen again.”  

Ken Radigan, Lecturer - M.S. in Insurance Management Program

I also believe that the insurance and reinsurance industries will learn a lot about how a pandemic may impact multiple lines of business at the same time.  The insurance and reinsurance industries will be addressing coronavirus losses from: Accident and Health, Life, Workers Compensation, Property (mainly their business interruption exposure), General Liability, and Directors and Officers insurance.  Historically these lines of business were thought to be diversified with few concerns about how they may be all correlated with an event like a pandemic.  

Read more about COVID-19’s implications for the need for technology, remote work, policy languageorganizational infrastructure, legal risk management and banks and equity in our previous Top of Mind installments. Learn more about Columbia University's Master's in Insurance Management and read the latest news here.