As companies continue facing COVID-19 challenges regarding a sick or isolating workforce, insurers are questioning the impact of resilience fatigue on their customers in 2022, according to a recent report by specialist insurer Beazley.
Although the majority (84 percent) of business leaders surveyed in the report said they would be more resilient in 2022, business risks still exist. For 34 percent of business leaders, risks such as business interruption, supply chain, boardroom, reputation and employer risk were listed as their top concern for the year.
“We are already seeing supply chain issues impacting property claims, with a possible overspill into technology product liability claims,” said Bethany Greenwood, group head of cyber and executive risks at Beazley, in a company press release. “We also see scope for COVID-19 issues driving directors and officers liability (D&O) claims.”
The report said that the liability landscape is expected to continue shifting as COVID-19 positive employees or their families could bring injury and manslaughter claims around vaccine mandates. Greenwood added that employment liabilities could also rise as staff raise concerns about how they were supported under remote working or whether they are being treated fairly going forward.
“Against this backdrop, clients will want improved granularity around how insurance will respond, and the industry will want to be clear it is not inadvertently including COVID-19 risk in policies,” Greenwood said.
Indeed, the report stated that because of this, expectations of the insurance industry are rising as clients value closer and more responsive insurance partnerships that focus on risk management and mitigation as well as traditional risk transfer.
As institutional burnout becomes more of a threat, particularly in pandemic-exposed sectors such as health, travel, education and hospitality, the report said that insurers need to be asking how they can support clients. This means that business leaders will likely look to their insurance providers for greater transparency on wordings.
Business leaders surveyed in the report said supply chain is their area of greatest concern and least resilience. The report attributed supply chain challenges to pandemic-related movement restrictions and labor shortages, as well as the growing issue of cyber attacks on critical infrastructure and natural disaster events. Beazley said the insurance industry has a responsibility to work together with its clients and find ways to adapt.
“As a specialist insurer, we can work with insureds across industries to pool and interrogate the data from automated supply chains,” Beazley said in the report. “Over time, we will be able to develop a hub of centralized services adding risk management value, surrounded by straight-forward risk transfer mechanisms for transferable risks.”
The report added that central services could include risk analysis, benchmarking and mitigation advice that can help analyze supply chain quality and business interruption resilience.
“The onus is on us to think through how we can help and how we can put together a product for supply chain risk because it is very material,” said Beazley CEO Adrian Cox in the report.
For its Risk & Resilience research, Beazley in January and February 2021 commissioned research company Opinion Matters to survey the opinions of more than 1,000 business leaders and insurance buyers of businesses based in the UK and U.S. with international operations.