15 Sep 2020
Posted in Insurance
Insurance lines in UK need to adapt as remote working is here to stay, says GlobalData
More than two thirds of small and mid-size enterprises (SMEs) in the UK expect that remote-working levels will be higher than before the COVID-19 period, which will have lasting consequences on the insurance industry. As a result, insurers need to adapt to changing times as remote working is here to say, according to GlobalData, a leading data and analytics company.
According to GlobalData’s 2020 UK SME Insurance Survey, SMEs in the UK expect staff to work remotely following the COVID-19 pandemic, a trend that will affect the insurance industry on multiple fronts.
One quarter of SMEs reported that remote working had increased since the beginning of the pandemic while 16% reported significantly increased levels. Among these two groups, a quarter expect remote working to revert to pre-coronavirus levels once the pandemic is over.
As employees remain at home, businesses will be using their office space less. According to research by Accumulate Capital, 73% of business leaders anticipate that UK businesses will downsize their offices in 2021, reducing the size of the commercial real estate market and subsequently the commercial property insurance market. Claims in the employers’ liability market have the potential to increase if employees do not have a proper workstation at home, leading to increased musculoskeletal strains and injuries.
Yasha Kuruvilla, Insurance Analyst at GlobalData, comments: “Remote working has indirect effects on businesses that provide goods and services to employees, such as restaurants and pubs. ‘Pret a Manger’ announced plans to close 30 locations and cut a third of its staff. Costa Coffee has also announced that up to 1,650 jobs are at risk. As businesses close locations due to decreased demand from employees, this will again shift the insurance landscape.
“Fewer physical locations will lead to reduced levels of property and public liability cover. However, as businesses start to shift their model – by increasing home delivery services, for example – there will be increased opportunities in other lines of business such as motor insurance.”