A new report by insurance and reinsurance marketplace Lloyd’s of London has explored the potential benefits of human capital insurance solutions for workforce management in the wake of the pandemic and future systemic risks.
The report, published in collaboration with KPMG, looks at how human capital, or the collective abilities and skills of employees, is a key driver of organisational value and a potential blind spot for firms failing to invest in their workforce since COVID.
In particular, Lloyd’s and KPMG focus on how insurers can support organisations following an adverse event by not only addressing the wider damage caused, but also by playing a preventative role.
With the pandemic impacting the global workforce, and many organisations still operating under a remote working model, the value of employees in achieving productivity is vital for business continuity, they note.
The report argues that firms are left exposed if they fail to understand the value of their employees, whereas those that invest proactively through upskilling, better engagement and culture management can ensure they attract and retain the best talent.
“Human capital is key to company value, and whilst insurance solutions already exist to protect this intangible asset, the past two years has highlighted the need for insurers to work with risk owners to manage the new risks that have emerged as work practices change and evolve,” said Trevor Maynard, Head of Innovation at Lloyd’s.
“Lloyd’s is a great place for such collaboration to happen and we hope to see new innovative solutions and products that will help protect companies’ human capital.
Paul Merrey, partner at KPMG UK, also commented: “Technology will need to play a key role in future human capital insurance solutions. Currently most organisations have limited capabilities in gathering and analysing in-depth employee data.”
“There is significant scope for insurance solutions that provide organisations with the required tools, knowledge and financial capital to overcome challenges whilst minimising business interruption and any adverse impact on their competitive position.”