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

In this fourth installment of the Top of Mind series, a conversation with M.S. in Insurance Management lectures on the industry impacts of the COVID-19 pandemic, we hear thoughts from M.S. in Insurance Management lecturer Richard Woollams on ways in which COVID-19 has shocked coverage definitions. 

Program Academic Director Teresa Chan invited Woollams to examine current and future organizational infrastructure stresses and adjustments.

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?

Few carriers can withstand having to pay policy limits on their entire property book in the same year. If carriers lose on legislative mandated coverage bills and the coverage fight, a lot of carriers go under. The issue of whether potential viral contamination constitutes “direct physical loss” sufficient to meet the policy requirement. There’s a meaningful divide in the law on this point if you look at the closest analogous situation: pollution claims. Pollution isn’t really like coronavirus but many claimants/litigants will try to make that argument.

Carriers are in a state-by-state deathmatch over mandated coverage bills and the coverage fight will require years of litigation."

Richard Woollams, Lecturer - M.S. in Insurance Management Program

The pandemic is also stressing every claims organization's infrastructure in a way that they probably had not been designed for. There may have been some disaster recovery planning, but I doubt that many assumed that their entire organization would have to work remotely for a year, which seems to me a likely outcome. At the same time, this is creating a big demand for extra claim handling help. Think of it like a big property cat, but nationwide in scope. No one staffs for that.  Counterbalancing the stresses of going 100% WFH is the fact that new claims "other than coronavirus", i.e. auto and general liability claims, are likely coming in at reduced volumes. 

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