Coronavirus (COVID-19) Impact on UK Commercial Insurance

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COVID-19 will have an impact on market premiums, claims, product uptake, and exposure. COVID-19 has changed, and will continue to change, consumer behavior. Reinsurance rates are likely to increase, and due to high competitiveness and a lack of disposable income among consumers, the costs of these rate increases could be passed onto commercial insurance customers. These changes will translate into increased demand for certain types of insurance policies, a shift in the way that businesses purchase insurance, as well as challenges for brokers, who have relied on face-to-face contact to help sell policies.

The impacts of COVID-19 will also be spread out over a long period of time. In the short term, the commercial insurance landscape will change as a direct result of struggling economies, country lockdowns, and reduced social interaction. Changes and developments in the medium and long term will occur due to lasting changes to consumer and business behavior.

This report explores the impact of COVID-19 on the UK commercial insurance sector. It examines the short- and long-term impacts of the government-imposed lockdown on the insurance industry and consumer and business behavior. It provides gross written premium forecasts for three commercial insurance lines of business and also examines the challenges faced by insurance brokers as a result of COVID-19.

Scope

– Lockdown measures will have both immediate and lasting impacts on the UK commercial insurance sector.

– Prolonged working from home will open up businesses to increased cyber risk and drive interest in cyber insurance.

– The lockdown will drastically reduce the number of claims in the motor insurance market.

– Brokers’ reluctance to invest in digital technologies will hamper their ability to engage with their clients during the pandemic.

Reasons to Buy

– Identify factors affecting growth prospects across the UK commercial insurance market.

– Discover how gross written premiums across the market will fare post-COVID-19.

– Assess how the pandemic will impact consumers’ approaches to commercial insurance.

Allstate
American Family Insurance
Admiral
LV=
Direct Line
Hastings Direct
Aviva
By Miles
insurethebox
Flood Re

Table of Contents

Table of Contents

1. EXECUTIVE SUMMARY

COVID-19’s impact on commercial insurance will be immediate and lasting

2. THE COVID-19 DISEASE

3. COVID-19 IN THE UK

A brief timeline

The impact of COVID-19 on the UK economy

4. THE IMPACT ON COMMERCIAL INSURANCE

Lifestyle changes will largely impact commercial insurance products

Growth in the motor insurance market is expected to remain flat in 2020

Commercial motor insurers will benefit from growth in online retail

Online shopping and working from home will benefit cyber insurers

The hastening of the popularity of online channels will also benefit cyber insurers

The commercial property insurance market will suffer from the downturn in the economy

Home insurers will benefit at the expense of commercial property insurers

Employers could face increased liability claims once offices are reopened

Changes to consumer expectations will spur the interest in usage-based insurance (UBI) policies

5. BROKERS WILL COME UNDER IMMENSE PRESSURE DURING THE OUTBREAK

The majority of business interruption policies in the UK do not cover pandemics

Lack of technological adoption harms brokers

6. THE UK COMMERCIAL INSURANCE MARKET AFTER COVID-19

Interest in pandemic insurance will be at an all-time high

Specialty insurers will benefit from attempts to insulate the economy from supply chain shocks

7. APPENDIX

Methodology

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