INSURANCE RESPONSE TO #COVID19
May 11, 2020
- The discussion on Insurance Response to #COVID19 assists companies to mitigating insurance risks e.g liabilities that arise from possible infection of customers, employees. We also got to hear the various interventions, from the regulators, insurers and brokers in light of the current pandemic
- Willis Towers Watson is a global risk & employee benefits advisor, opened up in Uganda in 2012. With clients across all sectors. Its departments include General Insurance, Health Benefits (Medical & Life) as well as the Claims department.
- The Insurance Regulatory Authority has offered guidance to the insurance companies. The current policies are being extended to include health insurance in light of #COVID19. Companies have also been asked to extend policies to include pandemics and waive cost sharing, in line with #COVID19. Some of the companies have responded already which is a good gesture
- On the issue of medical and life insurance, the Government is taking care of everything so no client has had to claim their health benefits so far. If the situation gets worse, the Government may have to open up to the private hospitals. The claims will then be honored and the insurers will respond in case of any deaths. It is sad that insurers have always excluded pandemics from policies and this is a wake up call to underwriters. The sector hasn't been tested fully.
- On Potential recovery of business with help from insurers, it should be noted that in Uganda, policies in regard to business interruptions of the #COVID19 kind are not in place. Uganda’s level of insurance development is limited and to cushion that level of risk is a practical impossibility. The present business interruption policies cover machinery loss, fires etc. Also, pandemics are neither time bound or geographically limited and so very tricky to insure against. Pandemic insurance is expensive and rare where it exists in the world. There is hope for a new fairly priced product in this regard after all this is done for the sake of the future. Sector players encourage businesses to mitigate their losses to the limit.
- On reduction of costs of operation, insurers should utilize short term savings on insurance premiums, advise clients on sums insured and ensure constant engagement and discussions that suit each of them. Policies can be made short term to quarterly instead of the usual annual. The regulator has relaxed the payment plans to more 60 days so that insurers maintain liquidity to pay claims. Clients are not advised to close down because not all hope is lost and they must have candid discussions with their brokers for the different businesses so as to get relatable insurance solutions
- Employees need to be covered by #COVID19 policies since they are putting their lives on the line in the course of duty. For the customers, it is difficult to prove that the customer got #COVID19 from company premises. Proving it is impractical. Otherwise, it would be a good thing to cover.
- Prior to #COVID19 , the results were extremely good especially for quarter one of 2020. The 2nd quarter is always a dry spell of trying to patch up things here and there. We hope that the govt stimulus and other interventions will help cushions the effects of #COVID19. The Uganda Revenue Authority has also offered relatable assistance in its own terms. The situation is making things different and will affect the growth curve. The sector players are hopeful that whereas it won't be as good as 2019, it will not be bad. The progressive curve of the last 7 years will still rise and the message of hope must be spread. The sums and scopes of cover will reduce but there shouldn't be a rise in premium rates.
- The Insurance Regulatory Authority has issued a circular with guidance notes that encourage insurers to; Increase the dates of notifying the insurer to not less than 30 days, Insurers to process claims much faster, put in place measures to easily reach their clients, the need to embrace #COVID19 preventive measures, companies to draw, strengthen and business continuity plans, encourage the companies to keep high liquidity among others as well as rolling out marine insurance very soon to cater those in the marine industry