
Electronic Chat with Robert Hartwig on COVID-19 and Insurance
Laura Mazzuca Toops | March 24, 2020
For almost 25 years, Robert Hartwig, PhD, CPCU, has been a recognized expert on risk and insurance in both the private and government sectors – most recently as President and Economist for the Insurance Information Institute in New York. He is currently Clinical Associate Professor & Director, Risk and Uncertainty Management Center at the University of South Carolina.
Hartwig spoke with ITA about how the insurance industry is responding to the COVID-19 pandemic, and its impact on the insurtech sector.
So far, how is the insurance industry responding to the COVID-19 pandemic?
The U.S. insurance industry as broadly defined across the p/c, life and health segments—entered this crisis period from a position of financial strength and stability. For p/c insurers, the largest question has revolved around the issue of business interruption coverage (BIC) and whether loss of business associated with COVID-19 shutdowns and slowdowns is covered by such policies. The answer is no. BIC is triggered by direct physical loss or damage as the result of a covered cause of loss (e.g., fire, explosion, wind, etc.). The actual or possible presence of a virus does not fit that definition. The fact that closure of the business may have been due to an act of civil authority (government action) does not affect this determination. In addition, virtually all BIC policies contain virus and bacterium exclusions.
Workers’ compensation insurance is another concern for p/c insurers, particularly related to instances in which healthcare workers contract COVID-19 as a direct result of their employment.
You have stated that you don't anticipate COVID-19 triggering another TRIA-type federal insurance backstop as after 9-11. Are there any circumstances where you see that changing?
No, I do not see this happening. There is no need for it. The p/c insurance industry is strong, stable sound and secure. There is no lack of coverage or capacity in the marketplace, which is why TRIA came into place—market capacity dried up and prices soared at both the primary and reinsurance levels.
New Jersey and other states have proposed legislation eliminating exclusionary language in insurance policies. Do you predict this happening in more states as the pandemic develops further?
The N.J. proposal was tabled and there is zero chance that elimination of exclusionary language would be upheld in courts. This would amount to retroactively rewriting longstanding contract provisions and would be illegal and unconstitutional by any standard. I do expect to see continued political grandstanding (common after disasters). Politicians have an unfortunate affinity for using insurers as whipping boys. Beyond this, it is highly doubtful that state insurance regulators would support such efforts. The reason is that putting insurers on the hook for billions of dollars of business interruption claims that were clearly excluded from policies and for which they never collected a penny in premium fundamentally threatens their solvency and would likely impair their ability to pay business interruption claims that they are legitimately called upon to pay (e.g., following a major hurricane).
Are specialty insurers more vulnerable to COVID-19-related claims than generalists?
Yes, some specialty insurers may have exposures not likely to be found among generalists. In some cases, the coverage may be more liberal (broader—having fewer exclusions) and they may also write coverages such as event cancellation that in some cases could be triggered.
Are any insurers responding by developing new policies that include pandemic? Do any insurers currently offer this?
The Insurance Services Office (ISO) has recently developed a form that would provide BIC coverage in the event of the actual or suspected presence of the COVID-19 virus. I am unaware of any insurer offering this coverage today.
What is the reinsurance market’s role in all this?
Reinsurers stand behind the primary insurers and thus far would have seen relatively few claims. That said, claims are possible in workers' compensation as the number of workers infected out of the course of their employment rises, as does the cost of such cases. Life insurers purchase reinsurance to protect themselves against excess mortality. At this point, the change in the overall U.S. mortality rate is not material.
How do you think the current economic crisis and COVID-19 will affect the formerly robust insurtech investment market?
Global financial market volatility will likely slow most VC investment activity, including insurtech. Funding is becoming increasingly scarce even for high-quality credit risks and liquidity has dried up throughout the financial markets. While these affects are temporary, increased risk aversion and a preference for more liquid investments are likely to last for some time.
How do you see newly adopted technologies like AI and ML playing a role in the current crisis?
Newly adopted technologies during the COVID-19 crisis will likely play a larger role in the biotech space, due to the enormous investment being made in COVID-19 treatment research. Such technologies could also provide insights into the development of treatment protocols that enhance medical outcomes. These insights could be of immediate use to medical professionals delivering care.
Featured articles
- Getting Creative to Hit COVID Curveballs Out of the Park
- Electronic Chat with Eugenio Gonzalez, Plug and Play
- New Report Projects Global Insurtech to Grow by $21 Billion During 2020-2024
- The 2020 Virtual Event Wasteland
- Insurtechs, Investors Optimistic About Post-COVID Future, New DIA/McKinsey Study Finds
- Finding Grandmas
- No Code / Low Code: The New “Shortest Route” In Insurance Delivery
- Are You Addicted to Copy-and-Paste?
- Electronic Chat with Nino Tarantino, CEO- Americas, Insurance and Mobility Solutions (IMS)
- Driving Life Insurance:Tech Alone Won’t Solve Business Problems
- Electronic Chat with Robin Roberson, Managing Director, North America, Claim Central Consolidated
- How Do You Make It Happen?
- Electronic Chat with Jason Liu, CEO, Zywave
- New Partnership Models Take Program Business to the Next Level
- New Study Finds Less than Half of Consumers Trust Insurers to Respond to Their Needs
- Electronic Chat with Andrew Mauritzen, CFO and Head of Insurance Industry, Exactuals
- You Want Us To Do WHAT For Free?
- Electronic Chat with Evgeny Aleksandrov, Co-founder and CEO, Pilotbird
- Electronic Chat with Chris Cheatham, CEO, RiskGenius
- New MIT Sloan Study Finds Few Companies Gain Big Benefits from AI
- The September/October ITA Pro magazine is here!
- “Being Right” is Just the Start of the Battle
- Electronic Chat with Amit Ranjan, Executive VP and CAO, Xceedance
- Planning for Your Business and Tech Future: Strategies, Plans and Budgets for Rapid Transformation
- Electronic Chat with Jimmy Padia, Founder and CEO, Floatbot
- Gelato with Dots and Sprinkles
- COVID-19 and the Insurtech “Junk Drawer”
- Even “Change” is Different Now. Your Strategic Planning Needs to Be Too.
- The Road Ahead for P&C Insurers: How to Understand Customers Better and Navigate the Post-COVID Insurance Market
- Electronic Chat with Jake Tamarkin, Co-founder and CEO, Everyday Life
- Strategic Planning in the “New Normal” Digital Era of Insurance – Your Next Move
- Insurer Tech Investment Priorities See Major Shift in a Post-COVID World
- Plug and Play Selects 25 Insurtech Startups for Winter Batches
- Digital Transformation – A Top Strategic Priority and New Reality
- Four Steps to Successful Migration of Insurance CCM Applications
- COVID-19 Accelerates Insurance Digitalization to Meet Customer Demand: World InsurTech Report 2020
- Electronic Chat with Greg Williams, Co-Founder, President & CEO, Acrisure
- Electronic Chat with Matt Perlman, Partner, IA Capital Group
- Insurer Digitalization: Are you a Competitor or a Laggard?
- Leaders are Leading and Creating the Future of Insurance Distribution
- 3 Things You Need to Know About No-Code
- Electronic Chat with Adam Kiefer, CEO, Talage
- Underwriting in 3D: Using Data to Adapt and Improve Life Insurance Sales
- Getting Past the "Gelato Syndrome"
- Insurers Know CX/UX is Important, but Don't Agree on Execution, Study Finds
- Electronic Chat with Steve Lekas, Branch Insurance
- How AI Can Attract Millennial Talent to the Insurance Industry
- Preventing Data Breaches
- A New Boom for Life Insurance: Shifting Away from the 250-Year-Old Policy Transaction
- Electronic Chat with Ty Harris, Founder and CEO, Openly
- A Digital Wildfire Creates a Burning Platform for Digital Insurance Business Transformation
- Digitalization, COVID-19 Spurring More IT Investment in Cybersecurity
- Electronic Chat with Michael DeGusta, CEO, ClarionDoor
- U.S. Consumers Significantly Underestimate Flood Risk, New Survey Finds
- The Future of Insurance: Opportunities in Ecosystems
- Electronic Chat with Todd Greenbaum, CEO, Input 1
- Majesco to be Acquired by Thoma Bravo
- The Evolving Role of Managing General Agencies
- Electronic Chat with Char Hu
- Electronic Chat with Allan L. Egbert, Jr.
- Electronic Chat with Christopher Tramontano and Zbigniew Gawienczuk
- Data Science is Gelato
- Insurance Innovation: Alive and Kicking
- Independent Agents Divided on Digital Experience, New Survey Finds
- Electronic Chat with Michael Jones
- Electronic Chat with Paul VanderMarck
- As Auto Insurance Premiums Shrink, Insurers Need Mobility Ecosystem, New Study Finds
- Property & Casualty Insurers Raise Digital Games as COVID-19 Elevates Customer Expectations, J.D. Power Finds
- Electronic Chat with Bobbie Shrivastav
- Meet the Board: Marissa Buckley
- Big Data and Insurtech: A Carrier Perspective
- Traditional Insurers Need Open Ecosystems, Partnerships to Remain Competitive, CapGemini Report Finds
- Electronic Chat with John C. Siegman
- 4 Ways AI is Empowering Insurers During COVID-19
- 6 Big Changes to Insurance from the COVID-19 Crisis
- Electronic Chat with Christopher Ewing
- Independent Agency Staff Morale High During COVID-19, New Survey Finds
- Electronic Chat with Brad Epker
- Tapping AI to Improve Policyholder Experience
- Electronic Chat with Manisha Bhargava
- ITA Pro Magazine, March/April 2020
- COVID-19 a Game Changer for Workers’ Comp
- Electronic Chat with Steve Comer
- COVID-19 Pandemic Forces Cancellation of ITA LIVE 2020
- Leveraging Digital Resources in the Time of COVID-19
- Electronic Chat with Robert Hartwig on COVID-19 and Insurance
- Celent Study: Most Small Businesses Still Unclear on Importance of Cyber Insurance
- The January/February 2020 ITA Pro is here!
- Deloitte: New C-Suite Roles Mean More Opportunities for Women
- Electronic Chat with Pankaj Parashar
- Electronic Chat with Tara Kelly
- Electronic Chat with Chuck Wilson
- ITA, InsNerds Collaborate to Enhance ITA LIVE 2020 Content and Coverage
- How SMBs Can Compete in Digital Ecosystems in the 2020s
- 4 Ways Insurance Can Prepare for New Data Privacy Laws
- Brewer Lane Ventures Launches and Hires Insurtech Vet Martha Notaras as Managing Partner
- 2020 GIA Cohort Launches on January 14
- The November/December 2019 ITA Pro is here!
- Electronic Chat with Joshua Snead
- Electronic Chat with Wendy Aarons-Corman
- Simplifying the Move to a Third-party Print Provider
- Take a Business-Driven Approach to Continuous Improvement for Core Systems and Processes
- Electronic Chat with Ron Glozman
- Guidewire’s Data Guru Mike Byam on How Insurers are Using Internal and Third-Party Data
- Electronic Chat with Russ Bostick
- Electronic Chat with Rock Schindler
- Electronic Chat with John Siegman
- Electronic Chat with Martin Burlingame
- Insurtech Landscape 2019: Top 5 Takeaways
- Grinnell Mutual Tackles Massive Transformation -- in Stride
- A Candid Conversation with Paul Mang
- SageSure Insurance Managers Improved Competitiveness by Consolidating Payments to a Single Digital Platform
- Digital Does Matter in Insurance-- And Insurers are Missing the Mark
- The 22nd-Century Insurer: Taking a Cloud-First IT Approach
- The September/October 2019 issue of ITA PRO magazine is now available in digital format here:
- ITA Pro Magazine May/June 2019
- Spotlight on the 2019 IASA Conference
- ValueMomentum Selects Erie as Site of Regional Development Center
- Capgemini and Majesco Become Alliance Partners
- Electronic Chat with Dr. Dan Shoham
- Electronic Chat with Todd Greenbaum
- Martha Notaras: The “Outsider” with an Amazing Inside View
- Electronic Chat with Larissa Tosch
- Martha Notaras Will Join ITA LIVE 2019 as a Keynote Speaker
- Five Things to Consider When Evaluating Your Cyber Risk
- ITA Pro Magazine, January/February 2019
- Synergy Between Insurers' IT and Analytics Teams Key to Operationalizing Insights, Says Novarica
- Major Ransomware Attack Could Hit U.S. with $89B In Economic Damages
- ITA Announces 1st of Three Keynote Speakers at ITA LIVE 2019
- Electronic Chat with Jeroen Morrenhof
- Legacy Systems Are Dead. Really? Don't Count On It.
- Now Accepting Nominations for the 2019 ITA Bridge Awards
- It's time to register for ITA LIVE!
- Registration is Now Open for ITA LIVE 2019!
- What to Expect from a Digital Experience Platform Implementation
- ITA Pro Magazine September Edition is Now Available
- It's National IT Professionals Day
- Save the Date for ITA-LIVE 2019
- OneShield Software and UrbanStat Work Together to Improve Real-Time Analytics and Risk Decision-Making
- ITA LIVE 2019 - SAVE THE DATE!
- Insurance Technology Association Announces New Editor-in-Chief
- August 2018 Edition ITA Pro Magazine is Now Available
- Enterprise Architecture in an Agile World
- Top 10 Tips for Securing Your Mobile Devices and Sensitive Client Data
- Industry Insight: 4 Global Insurance Trends in Digital, Data, Content Services and Security
- Diving Deeper into Prioritizing Your Strategic Digital investments
- Why Content Rules
- How Mass Personalization Will Open the Small Business Benefits Market
- At Year End 2017, Will Your Organization Be Protected from Cyber Risks?
- Do Insurance Bots Dream of Mitigating Risk?
- Conditioned to Respond
- Managing & Mobilizing Insurance Data in a Connected World
- Race to the Finish Line
- New Tools, New Opportunities in Claims
- ITA LIVE: Reaching Insurance Industry Crossroads
- Advice to Insurance IT Leaders: Keep Your Eye on the Ball
- New Date, Venue for ITA LIVE 2017
- Guidewire Makes Major Push to Small and Midtier Market by Acquiring ISCS
- Insurance Disruption is Happening Right Now
- Insurity Adds Strategic Investment Partner, General Atlantic
- Beyond Transformation: The Convergence of Finance, Risk, and Actuarial Functions
- The Rapid Evolution of Consumer Protection Regulation
- Talent Hunt: Finding, Attracting, Retaining Top People
- Insurers Flexing Their Distribution Models
- Technology Driving Disruption in Insurance
- Fear of ‘Next Bubble’ Challenges Life, Annuity Carriers
- Technology Allows Commercial Lines Insurers to Stand Out
- Single Sign-on Viewed as Biggest Tech Challenge for Agencies
- ISCS Observes 20th Anniversary; Scurto Predicts Major Changes Ahead
- Policyholders and Their First Impressions
- Progressive Making Progress on the UBI Front
- High and Dry: Insurers Search for Disaster Recovery Plans
- Insurers Sign The (Un)Dotted Line
- Reflections of a Retired Insurance CIO
- Mobile Device Management Just One Answer to BYOD Issue
- Lessons from GEICO and Progressive on Winning the Critical Buying Stage
- You Are a Target for a Cyber Attack
- Web-based Systems are the Next Evolution in Claims Technology
- Gaining a “Wow” Experience from Web Users
- Time to Shift from Business/IT Alignment to Business/IT Alliance
- Healthcare Insurers Changing to Consumer Model
- Organization is the Key for Selecting Software Vendors
- Analysts Expound on the Needs of the Mid-tier Insurance Market
- Finding the Cure for Obamacare’s Website
- New Software Solutions Benefit Insurers on the Inside and Outside
- Products, Market Impede Investment in Systems for Life Insurers
- Combatting Cyber Threats: Predict, Prevent, Persist
- The Future of Telematics Heads Beyond Insurance
- The Shame in Cyber Security Lapses
- Building Policy Administration Systems for the Future
- Insurers Look Into The Eyes of Their Policyholders
- It’s a New Dawn for the ITA
INSURANCE IT NEWS
- Electronic Chat with Eugenio Gonzalez, Plug and Play
- Nexilis’ Distribution Platform Selected by W.H. Greene and Associates to Drive Underwriting Transformation
- Breeze Adds Critical Illness Insurance to Digital Platform, Growing Partnership with Assurity Life
- Buckle Appoints Sharon Fernandez to Head of Insurance
- InsurTech NY Announces Global Early-Stage Insurtech Competition
- Altshuler Shaham Selects Sapiens for the Operation and Automation of its Provident and Pension Funds
- NetVU Announces Plans for 2021 Accelerate Conference
- Openly Secures $40M in Series B Funding Round to Accelerate Rapid Growth
ELECTRONIC CHAT
The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
-
Electronic Chat with Ellen Moser, Senior Client Executive, Origami Risk LLC
Laura Mazzuca Toops
Last month Origami rolled out new online tools enabling employers to track employee COVID-19 vaccinations and monitor outbreaks... READ MORE
ITA LIVE 2020
ITA LIVE 2020 –SAVE THE DATE!
April 5th – 7th, 2020
The Diplomat Resort
Hollywood, FL
Become a member today to receive updates – www.itapro.org/MR
BLOGS AND COLUMNS
only online
-
Down Market Opportunities Beckon Benefits Insurers
You have surely heard it said that small businesses are the growth engine for America. Today, the phrase has a special ring to it for benefits... READ MORE
-
Technology at the Heart of Change in Insurance
With stagnant growth and lingering low interest rates, the life insurance industry faces a challenging future... READ MORE
-
Got Policies? IVANS Service Helps Feed Commercial Lines Producers
Finding insurance carriers willing to write commercial lines risks has always been a challenge for producers... READ MORE
-
Technology Changes Coming Faster than Ever for Insurers
As Guidewire Software prepares for the start of Connections, its 11th annual user conference that begins on Nov. 2, Brian Desmond, chief marketing... READ MORE
Vendor Views
-
Sink or Swim: A Mid-Term View of Virus Impact
COVID-19 has said to insurers, “It’s time to move... READ MORE
- Vendor Views
Partner News
-
Big Data and Insurtech: A Carrier Perspective
Insurance has always relied on large volumes of data to gauge customer behavior and more. But as big data has gotten bigger, insurtech has empowered... READ MORE
- Partner News