Potential Implications of COVID-19 for the Insurance Sector: How the Coronavirus Outbreak May Impact Insurers Operationally and Economically.

COVID-19 is impacting the insurance industry in multiple ways-from employee and business continuity issues to client service considerations to the financial outlook. Here are some key issues insurers face and potential action steps they could take.

Insurers are responding to the widening COVID-19 outbreak on multiple fronts--as claims payers, employers, and capital managers. Each has its own distinct challenges, not just for the insurance industry, but for the economy and society at large.

However, the most immediate concern for insurers is protecting the health and safety of employees and their distribution partners in the agent/broker community as they strive to maintain business continuity. Like the commercial policyholders they serve, insurers are being challenged to review and update their crisis management plans and take steps to continue operations with a minimum of disruption to clients.

If they haven't already done so, insurers should consider establishing cross-functional, emergency decision-making teams to coordinate the organization's response, set new safety protocols, and assure quicker action as conditions continue to evolve. (1) A comprehensive communications system should also be in place to keep employees, distributors, and clients fully informed about the status of business continuity plans and instructions on how to remain personally safe. (2) One of the biggest challenges could be enabling alternative work arrangements for insurance company employees if needed to protect staff and adapt to possible office access restrictions, all while assuring business continuity. Emphasis on efforts to contain the spread of COVID-19 may mean enabling insurance company staff--from actuaries to underwriters to claims managers--to work offsite, most likely from home. Insurers should ascertain whether employees can access necessary files and conduct business from remote locations. In addition, chief information security officers (CISOs) may need to establish new cybersecurity protocols to permit the safe exchange of confidential information among employees connecting from outside the office. Many organizations are setting policies around remote access to support social distancing. As companies move toward remote protocols, chief information officers, chief technology officers, and CISOs should ensure that offsite workers have access to the following technology capabilities:

* A laptop or desktop computer, preferably equipment issued by...