Covid-19 Idea Pulse Alerts: Week 6

INSURER ACTIONS BETWEEN JULY 11 AND JULY 24, 2020

The Idea Pulse series on COVID-19 monitors innovations and insurer strategies that are being shaped in response to the COVID-19 pandemic and extended “new normal”. These are some of the noteworthy developments across the global insurance industry in the fortnight of July 11 to July 24, 2020.

Products for New Risks

In Singapore, Chubb has launched Work from Home (WFH) Insurance for the Asia-Pacific region, a group product covering employees working from home during the pandemic. The new policy is considered to be a market-first in the Asia Pacific. Chubb’s plan covers mental health benefits for psychological counselling, ergonomic injury and prevention benefits for postural injuries or strains resulting from inconsistent workstation setups. It also offers coverage for accidental death and permanent disability payments for slips and falls within the home. Chubb had previously launched an individual work from home policy, in the same market, in partnership with local insurance comparison site GoBear.

Specialist insurer Beazley has launched Virtual Care in Asia, providing comprehensive insurance protection against risks associated with technology-enabled healthcare and wellness services all in one modular insurance policy. The timing is relevant as telehealth usage has grown during the pandemic. Previously, firms would have purchased individual policies for each risk class, however, Beazley’s Virtual Care offers four pillars of cover to ensure policyholders are not left with unexpected gaps in coverage.

The four groups of cover offered under Virtual Care include medical malpractice and professional indemnity cover, tech and media liability cover, public and products liability cover and cyber cover (such as protection against cyber extortion and data recovery loss). Virtual Care covers telehealth and mHealth service providers, IT platforms used in health management and a range of lifestyle and wellness technologies. Beazley’s Virtual Care has previously been successfully rolled out in North America, the UK and Spain in the past three years, which enables Beazley to track and analyse claims trends within this sector.

In the US, Collective Health, a health tech platform for the employer-sponsored health insurance market, is offering Collective Go ™, a comprehensive solution for COVID-19 screening, testing, and monitoring for families and caregivers. The product is offered in partnership with UrbanSitter, an online and mobile service that connects working parents and sitters. The plan provides both parents and sitters support for symptom screening, uploading their test results, and will certify their compliance with the testing protocol through a mobile app. Before working together, families and sitters can ask to see each other’s active Compliance Certificate in the Collective Go™ app.

Bikes have become the preferred mode of commuting for officegoers across the world as the safest transport option in the new normal. In Japan, 1 out of 4 workers now use bicycles for their work commute to avoid crowded public transport. In the UK bike sales have also soared upwards of 50% since April this year for similar reasons. As workers make the switch from cars to bikes for daily commutes, the requirement of third-party liability insurance needs to be considered.

To meet this need, Digital insurer Laka is offering third-party liability bike insurance for £1 per month until the end of the year. The plan is attractive because bike owners may not have liability insurance. Bicycles are sometimes insured against theft under a standard home contents policy, but this cover does not include on-road third party liability or accident damages.

Travel Insurance in COVID-19

In a bid to alleviate traveller concerns and spur some interest in travel, industry operators have taken a hand in providing COVID-19 coverage with travel insurance.

UK travel industry trade association ABTA has launched a new travel insurance product underwritten by Axa plc. The ABTA Travel Sure product offers single and annual multi-trip policies for travellers with existing bookings or rescheduled holiday bookings. The plan also offers a range of versatile benefits at no extra cost – from holiday providers going out of business, missed connections, cruise and gadget cover to mobile access to English speaking doctors.

UK’s largest tour operator, TUI is offering free COVID-19 cover for all 2020 holidays or travel on or before December 31, 2020. Underwritten by Axa Partners, TUI Holiday Guarantee covers overseas medical expenses and extended stay expenses. TUI’s free plan covers COVID-19 only and customers are required to purchase standard travel insurance. Germany headquartered TUI has now extended this plan to all European markets where they operate.

UK based airline and tour operator Jet2 brands Jet2.com and Jet2holidays have added COVID-19 cover, which comes at an additional cost for new policies, to all travel insurance policies purchased with flight or holiday bookings. The extra Covid-19 cover has been automatically added to all policies purchased since April 9, 2020. Covering medical expenses and cancellations, the plans also insure customers if they are not allowed to board their flight as a result of a positive COVID-19 test or raised temperature.

International students and visitors to the US now have access to COVID-19 medical expense insurance for COVID-19 from two insurtechs. California based insurtech, Visitors Coverage which had launched COVID-19 screening cover in June have now expanded their offering of travel insurance plans. In addition to COVID-19 testing and treatment, other featured benefits among the portfolio of A-rated COVID-19 plans available include free telemedicine consultations, coverage in areas with travel advisories, family plans, pre-existing conditions coverage and more.

Texas-based insurtech Insubuy has followed-up with a similar proposition. Insubuy has announced several plans that cover treatment for COVID-19 just like any other new medical condition that occurs after the effective date of the policy, underwritten by insurance companies Crum & Forster, Lloyd’s, and Sirius International. The product targets travellers, international students and exchange visitors to the US.

Systemic Risks

Earlier this month, Lloyds of London published multiple proposals outlining open source frameworks for covering widespread non-damage business interruption with catastrophic losses to the economy. John Neil, CEO of Lloyds reported in an interview this week that the Canadian government is interested in “exploratory discussions” on partnership models for black swan events that exceed the capacity of private capital. Other governments are have also expressed interest in the Lloyds framework.

In the US, global reinsurer Chubb also released the details of a proposal in early July, a pandemic business interruption program to cover future pandemic risks. The program is structured into two components: a parametric insurance model for small businesses that provides a cash payout when a pandemic is declared and a separate voluntary indemnity program for medium and large businesses with more than 500 employees, with losses paid through the existing industry claims adjudication process.Both depend on the federal government assuming a substantial percentage of the risk, through direct U.S. Treasury funding to insurers for the small business program, and through “Pandemic Re” a government reinsurance entity for medium and large business losses.

Chubb’s pitch joins two earlier proposals that have originated in the US  – Maloney’s Pandemic Risk Insurance Act (PRIA) under discussion in Congress and, parametric trigger based Business Continuity Protection Program (BCPP) backed by the National Association of Mutual Insurance Companies, American Property Casualty Insurance Association and Independent Insurance Agents & Brokers of America.

The US programs are focussed solely on pandemic business interruption whereas the Lloyds frameworks consider systemic risks in general.

The Lloyds market has also started acting on their proposed responses. With over 150 countries engaged in the effort and COVID-19 vaccines expected by end of this year, the next challenge is ensuring rapid shipment and distribution globally. To that end, Lloyds has announced the creation of its newest “syndicate in a box,” Syndicate 1796, set up to insure the storage and transportation of a COVID-19 vaccine once developed, to emerging economies.

Syndicate 1796 has been developed by Lloyds Lab alumni insurtech Parsyl, creators of an IoT supply chain data platform for cargo insurance, in close partnership with Ascot as managing agent.  Other cooperating members include AXA XL, specialist insurance brokers McGill and Partners and Gavi, the Vaccine Alliance. The Syndicate forms the foundation of the new Global Health Risk Facility (GHRF) at Lloyd’s, which aims to provide comprehensive insurance and risk mitigation services to support the manufacturing and distribution of COVID-19 vaccine development efforts. The syndicate is expected to receive permission to underwrite by August and it aims to start writing business from 1 October 2020.