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

Since COVID-19 hit the U.S., businesses have involuntarily been faced with disruptions in operations which have consequently created loss. As we continue our Top of Mind series- a conversation with Columbia University Insurance Management lecturers surrounding industry impacts of COVID-19 prompted by Academic Director Teresa Chan, we hear thoughts from lecturer Nick Weltmann about an impending increase in underwriter and actuary work demands. In this third installment, Weltmann shares how COVID-19 has created the need for review of, and consideration for, the ways in which policies are written and approved.

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?

Working from home will create difficulties for underwriters and actuaries from a direct company point of view. Underwriters will be besieged with requests to review Business Interruption (BI) wording on all policies and orders not to write BI coverage in new policies will likely occur.

New pandemic exclusions will have to be written in conjunction with claims and legal. The approval process will be onerous.

Nick Weltmann, Lecturer - M.S. in Insurance Management Program

In the meantime, both underwriters and actuaries will have to help determine a probable maximum loss  and a maximum possible loss for the pandemic. Reserving actuaries will also be asked to determine ranges for the ultimate loss, as well as the probable loss payout timeline. They’ll be working closely with the enterprise risk management team to quantify the risk to the company in terms of capital adequacy and underwriters will be asked to help determine what reinsurance is in place.

Read more about lecturers Marguerite DeMartino’s predictions on the importance of incorporating technology or Alejandro Zarate Santovena’s observations about remote work in insurance in our previous Top of Mind series installments. Learn more about Columbia University's Master's in Insurance Management and read the latest news here.