Insurers around the globe are obviously closely watching the various outbreaks of the coronavirus. As the death toll climbs, important global events get canceled, people are prevented from traveling and the manufacturing supply chain is disrupted, insurance providers are justifiably worried about mounting claims.

So far insurers, many of whom are wisely applying the lessons learned from handling the Ebola and SARS outbreaks, have reason for guarded optimism, according to a recent article by Hailey Ross and Ben Dyson in S&P Global Market Intelligence:

“Life and nonlife insurers will be exposed to claims from the outbreak of the new coronavirus, according to analysts, but there is a sense that claim levels on both sides of the industry could be constrained by low insurance penetration and restrictive policy language (exclusion clauses)…insurance claims may not reach the levels suggested by the case numbers, even in

China, where the bulk of the cases remain concentrated. Taking life and nonlife together, Moody’s said Feb. 4 that it expected 2019-nCoV claims overall to be ‘low’ and that so far ‘there has been limited adverse impact on Chinese insurers.’”

It may seem counter-intuitive, but coronavirus could actually be an opportunity for insurers…even in China. But taking advantage of this opportunity requires a certain level of agility and readiness. Adding new insurance products to commercial and personal insurance lines of business could take a long time, especially for core legacy systems.

Turning Crisis into Opportunity

Tapas Bhowmik, an insurance analyst at GlobalData, a leading data and analytics company, shared his view of how the virus could actually help private Chinese insurers strengthen their brand and sign up new insureds for the long-term:

“Most of the private insurers do not provide cover for Class B infectious diseases. However, some insurers suspended the restrictive clauses and are sharing part of the cost burden as goodwill and social responsibility. The current health crisis is expected to accelerate shift in consumer attitude towards private health insurance. Increased number of people is expected now to look to purchase private health insurance to complement their existing public health insurance. This presents a significant growth opportunity for private health insurers in China.”

The S&P Global Market Intelligence article quotes a recent in-house report to highlight that gains for insurers may not be limited to China: “On the nonlife side, S&P Global Ratings said demand for business interruption, event cancellation and liability-related coverage ‘could rise as policyholders seek to insulate themselves against man-made and natural calamities.’”

And Robert Lane, senior vice president at Alliant Insurance, told Insurance Journal that it is critical for policyholders to review their current insurance program in coordination with their broker and experienced coverage counsel. Property and all risk policies, business income and BI insurance, crisis response and key person coverage are all areas where coverage may be available for coronavirus.

This increased contact between insureds and their providers worldwide could be a golden opportunity for insurers who can quickly access a 360-degree view of their customer and offer improved plans, extended coverage, etc.

Sapiens Can Help

As opposed to legacy systems, Sapiens next-generation policy administration systems (PAS) enable our existing customers to bring new offerings to the market rapidly, including specialized coronavirus offerings. Our next-generation PAS offers an immediate, full solution with a minimal viable product (MVP) option, so that insurers can quickly release new products or features with minimum investment, to take inventory and see how customers react.

A carrier can take advantage of the flexibility a configurable PAS offers. It allows them to quickly and easily making changes to their new offerings, reacting to an evolving situation such as coronavirus, as well as customer demands and needs. They’ll have the necessary 360-degree visibility to up-sell to clients in real-time, quickly change policies to add appropriate exclusion clauses and offer business interruption/event cancelation plans to relevant commercial clients.

New products could include coverage of damage that is not usually covered by health insurance or travel insurance. For example, a person who has been isolated for 14 days following contact with coronavirus sufferers, or a business that suffers more than 10 percent absenteeism due to employees who are legally prevented from commuting.

Sapiens also offers branded, product-rich templates, based on industry best practices and Sapiens’ extensive experience and expertise, that can empower insurers to release new coronavirus insurance products within days!

Contact Sapiens for more information.

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