It is now several months since the World Health Organization declared COVID-19 a pandemic and there is no denying that the world landscape has changed tremendously. In fact, most of the planet remains in a state of public health alert and terms like physical distancing and quarantine are now part of the global lexicon as we scramble to put on facemasks and wipe down our newly purchased groceries. Worldwide, beginning-of-July numbers report nearly 11 million cases with over 500,000 deaths. Canada has seen over 100,000 cases and close to 8,000 deaths. Thankfully, infection rates are starting to decrease across Canada, although we truly do not know how long this respite will last or if there will be another wave of infection later.
What does this mean for underwriting in the post-COVID insurance world?
The insurance underwriting experience has been, in a word, interesting. Travel has always been, even pre-COVID, a risk selection consideration. However, it was previously only clients travelling far and often who might warrant a rating, an exclusion or even an outright decline.
Today, with government-issued travel advisories still in effect, even brief and nearby travel could merit the same approach in risk consideration. Meaning, your client could plan to travel as close as the United States for a long-weekend and be issued a rating, an exclusion or decline, a testament to the now accepted maxim that the virus knows no boundaries, human or geographical.
What about the growing number of Canadians who are infected and survive?
Will they be insurable and if so, how long after recovery? Recovery from the COVID-19 infection is currently a murky area of intense interest as cases vary between infection with not so much as a single symptom, to survival with impairment to lung function, clotting of the arteries and in some cases, other residuals. Of particular concern is the emergence of a multisystem inflammatory condition affecting children as a direct complication of COVID-19, thankfully a rare occurrence in the relatively few cases where the virus affects children. Amongst all of this ambiguity, the underwriting guideline remains individual case consideration until further notice.
What about the at-risk segment of the population?
This group would consist of those, regardless of age, with pre-existing and common conditions such as asthma, diabetes and hypertension. In Canada, this group counts in the millions and underwriters will have to bring their A-game in assessing risk in clients who are in these vulnerable groups. Whether this entails further testing, more medical reports, different questions on the insurance application or more, remains to be seen. In the meanwhile, underwriters will continue to keep a close eye on COVID-19 and its affects on insurance guidelines, because although hopeful, none of us knows what is around that corner.
For up to date information on COVID-19 underwriting guidelines, continue to check our regularly updated COVID-19 Insurers Update page (login required). You can also reach out to our Advanced Underwriting team, who are here to answer your questions.
This article is provided by Know the Risk, an educational website that contains underwriting information for insurance professionals, available exclusively to Advisors affiliated with PPI (login required).