March 09, 2021
Few were prepared for the abrupt disruption of life-as-usual caused by the COVID-19 pandemic. Profound changes in work, school, and social routines took place over a matter of weeks. Employees carved out workspaces in their homes and learned to use Zoom and Google Meet, students transitioned to virtual classrooms, and everyone adapted to new health and safety routines. Retailers ramped up online shopping and implemented curbside pick-up while restaurant owners struggled to get by on carryout and delivery business.
Changes in work, learning, shopping, and dining routines transformed the risk profiles of many organizations. For some exposures, loss frequency fell due to fewer employees in workplaces, fewer vehicles on the road, and fewer customers in public spaces. In other cases, however, coronavirus-induced changes resulted in a heightened risk of loss. Telecommuting, for example, created new data security challenges. Food delivery produced unexpected liability exposures for restaurant owners. Telehealth made it more likely that doctors will miss diagnoses.
As this Advisen/色多多视频white paper — Everything you know is wrong: New risk management paradigms in the post-pandemic world — written (mid-December), the pandemic has entered a frightening new phase as daily case totals, hospitalizations, and deaths surge to new records. Some states and municipalities are implementing new rounds of lockdowns. No one seems sure how bad it will get or how soon it will end. Eventually, however, the virus will recede, and lockdowns will be lifted. It is unlikely, though, that life will return to the pre-pandemic state of affairs. According to , "It is increasingly clear our era will be defined by a fundamental schism: the period before COVID-19 and the new normal that will emerge in the post-viral era: the 'next normal.'"
In the next normal, many of the pandemic-induced changes to the ways people work, shop, dine, and obtain medical services will persist. Many people will continue to shop online, putting pressure on brick-and-mortar retailers. Fear of future pandemics will transform supply chains and factor into new building design and construction. At colleges and universities, some combination of in-person and online courses will be the norm. These changes will permanently alter the risk profiles of businesses, schools, nonprofit entities, and healthcare providers.
Pre-pandemic insurance and risk management strategies may not be relevant in the future. Risk managers and their brokers must understand how risk profiles have changed and ensure that risk management programs keep pace with evolving exposures. They also need to reassess their insurance programs to be certain that coverage aligns with their risk profiles and ensure that coverage gaps are identified and managed.
To learn more about what we found, download "Everything you know is wrong: New risk management paradigms in the post-pandemic world" – a white paper written in collaboration with Advisen and AXA XL.
