Looking to innovation: Taylor Fry’s Win-Li Toh
Deep impact A new report analyses the effects of COVID-19 on insurance, class by class, and finds all are likely to take a hit By John Deex
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hile there are some standout contenders – see travel, trade credit – Taylor Fry’s recent Radar report suggests very few, if any, lines of insurance will escape unharmed from this year’s pandemic. The annual analysis draws on Australian Prudential Regulation Authority data to look at trends across each class of insurance, and unsurprisingly this year’s findings are dominated by the impact of COVID-19. “By highlighting the challenges and opportunities in these particularly testing times, we offer you a clear picture of the industry, where it’s headed and your place within it,” Taylor Fry principal Kevin Gomes says in the report’s introduction. That picture, unfortunately isn’t too pretty. Mr Gomes says the impact of COVID on insurers is “significant”. Travel is in a mess. So too is trade credit, which doesn’t feature in the report because APRA doesn’t provide separate data. While experience varies by class of business, it could be that none will escape entirely. “Most lines of business are likely to experience adverse effects, as poor economic conditions and increasing community hardship constrain premium increases and apply ongoing pressures on claims,” Mr Gomes says.
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Taylor Fry believes that during “an unprecedented time of disrupted living, uncertainty and historical change”, insurers are grappling with five big themes – pandemics, a warming climate, mental health, cybersecurity and restoring consumer trust. While COVID has been the focus for most insurers over the past six months, Mr Gomes says the industry must not take its eye off other longer-term risks such as climate change “with its ongoing and far-reaching implications”. Radar contributor and Taylor Fry principal Win-Li Toh told Insurance News that while the issue of restoring consumer trust isn’t covered in detail in the report, in the light of the Hayne royal commission findings it is still a key concern. “The insurance industry is very much in the headlights but in kind of a negative way,” she says. “It has some work to do in restoring consumer trust, and to really educate the public about what’s covered and not covered. “If the insurance industry is innovative and works together to create products that respond in people’s time of greatest need, then that’s what is required.” Here are highlights of some of the key sectors dealt with in the report.
