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As the industry continues to grapple with the impacts of COVID-19, insurers are leaning further into digital transformation, understanding the importance of leveraging technology platforms that can swiftly incorporate new forms of data and analytics to help them become more proactive and remain ahead of the curve. At Insurity, we often discuss the importance of platforms built with flexibility and seamless third-party data integration capabilities—that can meet the needs of today while anticipating the risks and opportunities of tomorrow. It’s become clear: in the face of this pandemic, the business case for greater agility and responsiveness has been proven. Going forward, insurers must be able to pivot on a dime—and that means being able to quickly apply innovative forms of data and analytics to understand both risk and reward.

Over the course of the pandemic, we’ve been working with our insurance clients, encompassing carriers, re/insurers, MGAs, and brokers, to help them understand how COVID-19 is impacting their businesses. As such, we’ve uncovered three primary use cases for how P&C insurers can use COVID-19 data to understand potential claims, premium at risk, and new business growth opportunities.

In the following use cases, you’ll see examples of how we have integrated sample customer portfolios with COVID-19 data from Johns Hopkins University and unemployment data from the Bureau of Labor Statistics. Additionally, we show how census population data, industry wages, and risk scores, derived from our Valen risk models, can all be pulled together within SpatialKey, Insurity’s geospatial analytics platform, to help you gain ongoing actionable intelligence on pandemic-related issues that affect your book of business. While this sounds like a lot of data (and it is!), it can all be intuitively visualized to show exposure broken down by state, county, and other attributes to help you understand potential workforce and insured distribution impacts. As a benefit to Insurity clients, the data and capabilities shown here are being provided at no charge.

Here are 3 pragmatic ways to use COVID-19 data to understand business impacts:

1 – Determine Potential COVID-19 Workers’ Compensation Claims

The SpatialKey platform applies advanced analytics and visualizations to track and map COVID-19 hot spots down to the county level. When layered with an insurer’s exposure/payroll data, this enables an insurer to determine areas with the highest potential increase in pandemic-related workers’ compensation claims. For example, on the map shown below, high-risk areas represent a significant amount of insured payroll combined with the number of confirmed COVID-19 cases as a percent of the population in that region. With this data, you can take a number of immediate actions in problem areas, such as discussing mitigation activities with clients and insureds, taking a closer look at the state-specific COVID-19 claims regulations, and planning for potential losses well in advance. This provides a way for you to soften the impact of claims and become a guiding hand for policyholders when they need it most.

Higher COVID claims

Figure 1: The above screenshot shows counties in which clients may experience higher COVID claims based on filters applied on high-risk industries such as health care. It also takes into account the percentage of confirmed cases (i.e. the number confirmed as a percent of the population). For this client, if their payroll were to be impacted at the same rate that COVID is impacting the population in Middlesex, MA, they could expect to see $365K in payroll impact for health care workers.

 

2 – Anticipate Premium at Risk Due to Exposure Reduction

While many insurers are rightfully concerned about an increase in claims due to COVID-19, they are equally concerned about the potential premium at risk resulting from high unemployment rates across the country. Unemployment rose from 6.2 million people in February to 20.5 million in May, and 19 million collected unemployment in June according to the Bureau of Labor Statistics.

With many businesses forced to implement layoffs or furloughs during this crisis, there is a potential for higher volumes of insured premium loss. Traditionally, insurers identify this reduction in exposure during an audit that doesn’t occur until several months after the end of the policy term, leaving them to react long after the damage is done. Instead, the SpatialKey platform can help you view the potential impact by layering unemployment data over insured payroll to determine which portfolio businesses are most at risk for policy termination, delayed premium payment, or premium reductions as policies are up for review. The dashboard can be filtered by industries listed in the North American Industry Classification System (NAICS) to show which are also most likely to be affected by COVID closures as well, such as retail and restaurants (see Figure 3). You can also isolate policies with upcoming termination dates to help you anticipate how your portfolio might look in a few months. Armed with this information, your organization can better prepare and react to potential premium loss.

Areas with the highest percentage of unemployment

Figure 2: The above screenshot shows areas with the highest percentage of unemployment (dark purple). Coupling this information with an insurer’s employee count per county provides a way to focus on the areas that matter the most. The sample client data shown here has 6 policies in Gwinnett, GA, that may be impacted by the shelter-in-place orders. The unemployment rate is over 41% in this county. Given the extremely high unemployment rate and that these 6 policies may have a higher chance of layoffs, the insurer may want to reach out to check on the reality of potential payroll reductions.

 
3 – Avoid “Landmines” While Trying to Grow Your Business

Insurers may want to stay cautious with their portfolio during the pandemic, but with no imminent end in sight, they must also look to offset their potential premium losses by adding exposures deemed safe. The SpatialKey platform helps you identify prime growth areas while avoiding high-risk COVID-19 hot spots. Whether you define ideal growth opportunities through minimal market penetration or great premium structure, you can visualize that metric against the volume of COVID-19 cases in the region to make better informed decisions. Additionally, you can go one step further to leverage Valen Predictive Analytics workers’ compensation risk models to further identify which regions fall within your risk appetite. By leveraging predictive analytics to identify profitable pockets of risk in a COVID-19 dense area, you can grow in an intelligent way while minimizing your risk.

COVID-19

In the above screenshot, your attention is drawn to areas where an insurer may want to avoid marketing and growth activities while COVID-19 is still a concern. The areas in red represent areas where there is a high number of COVID confirmed cases and where an insurer has higher market penetration. These are just a few of the metrics that could be relevant when considering growth strategies amid the constraints of COVID. A host of other variables, such as industry, can also be taken into consideration based on an insurer’s business needs and objectives. Click here to read the full article on our blog.

 

Pulling all of this data together in a visually compelling way alongside advanced analytics helps you illuminate key business considerations as well as anticipate future impacts driven by this ongoing pandemic.

Interested in learning more about the solutions and data shown here, or have other pandemic-related business concerns? Reach out to your Insurity account manager directly, or get in touch here and one of our subject matter experts will reply to you soon.