The insurance marketplace is always changing. Each year brings new challenges and opportunities. 2020 was no different and created a unique challenge and opportunity for the insurance industry to respond. The pandemic has been the most significant agent of change to the insurance marketplace since the tragic events of September 11th, 2001. Covid-19 has been a pandemic like we have not seen in over a generation in this country. The insurance industry as a whole returned over a billion dollars to policyholders during this difficult time and worked with policyholders on setting up favorable payment plans. The insurance industry was also able to help its promises by paying claims with little to no interruption.
Outside of Covid-19, hurricane season was more severe than in years past and property damages were higher than expected. Both commercial and personal auto insurance markets underperformed with profitability continuing to be an issue across the board. This also had an impact on the umbrella and excess market. We have seen a tightening of this market including price, terms, conditions, and availability of limits.
Further, Covid-19 has changed life insurance underwriting. Moving forward, we believe there will be a question on all life insurance applications related to Covid-19. We think the application will ask, "Have you ever been diagnosed by a medical professional with Covid-19?" or something of the like. It will be interesting to see how the antibody test is taken into consideration. There are many unknowns but one thing has not changed. The 2-year contestability period for life underwriting has not and will not change. Life insurance applicants must continue to answer underwriting health questions openly and honestly. To quote one of my favorite teachers, "Please answer the question we asked, not the question you wish we asked."
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