COVID-19 Cause and Effect

As we continue to meander our way through the Coronavirus pandemic, life still goes on in new and interesting ways. Many people still have jobs and, for those who do not, we enthusiastically anticipate the day when those who cannot work from home are safely able to return to work. For those that are working, an altered environment at the office or  home is likely the new norm.
While we manage our lives through the current reality, here are  some COVID-related issues looked at with a “Cause and Effect” perspective. 
Long Term Care Insurance

• The application process has become much more restrictive (temporarily) and has required additional steps.
  
• Some insurance companies have declined applications for people in their late 60s or older. Others have reduced the maximum age to as low as 65.
  
• Many companies require applicants to wait up to 6 months after a negative COVID-19 test before applying for a policy.
  
• Younger individuals’  applications have been expedited in some cases.
  
• Some are charging 5%  to 50% more for coverage and are reducing spousal discounts.
  
• Filing long-term care claims has become more complicated.
  

Dental Services

• The use of privately insured dental services fell 75% in March and 79% in April, compared to the same months the previous year.
  
• In May, when states began to lift restrictions on dental care, utilization still declined, but by only 27%. June increased by 1% in utilization.
  
• COVID-19 surcharges have been added to the services in some offices.
  

Commercial Real Estate

• Buildings are operating at a severely reduced capacity, as most companies are enforcing a remote work environment.
  
• Older, more compact workstations are yielding to larger and more private spaces to allow for proper social distancing. Some companies have realized that they can be effective without as much space and, therefore, are reducing or eliminating commercial space. Thanks to technology, employees are proving to be just as productive from home as they were in the office.
  

Construction Industry

• Transporting people and equipment across borders has become more complicated.
  
• Most construction projects were deemed “essential,” so work has continued; however, work slowed down at the onset to navigate the new safety and cleaning regulations. Also, projects are taking longer to complete, increasing the likelihood that there will be claims.
  
• Key trends to watch in this year’s construction market (as written in a July blog post titled “2020 Construction Industry Outlook,” by John Doherty, staff leader for Nationwide’s Middle Market Practice Group and Jerry Flibbert, senior technical underwriting consultant for Nationwide)
  
  • Economic uncertainty
    
  • Labor shortages
    
  • Recruiting young workers
    
  • Technology
    
  • Substance abuse
    
  • Defect claims
    
  • Prefabricated and modular builds
    
• Builders risk and general liability markets are seeing large increases in pricing and experiencing capacity reductions, particularly in the excess liability marketplace.
  

Telehealth

• As we predicted several years ago, telehealth (Telemedicine) is now here to stay. Due to the pandemic, utilization rates for telehealth services skyrocketed past previous levels. As technology continues to improve, this medium of care will only become more popular. 
  

Of course, there are many other segments of the economy that have experienced drastic change and will transform practices now and in the future.. As a society, we will adapt and hopefully see a solution much sooner than in past pandemic episodes. 
The one constant is change, which can impact every segment of the economy in both positive and negative ways. Since we are in an election year, it is appropriate to remind you that Change has no constituency. The challenge remains, how do we manage the effects?

Sources:
 Insure.com assessment. Benefit Specialist Magazine.
 FAIR Health study, Dental Services and the Impact of COVID-19; An Analysis of Private Claims.
 National Underwriter 10/20