Data and analytics company GlobalData believes that the increase in remote working due to the COVID-19 pandemic will have lasting consequences for the insurance and reinsurance industries.
With remote working levels set to stay significantly higher than before the coronavirus crisis, /reinsurers will need to adapt to remote working being more common for the foreseeable future, analysts said.
GlobalData has released a 2020 UK Small Medium Enterprises (SME) Insurance Survey, in which it showed that SMEs in the UK expect staff to continue work remotely following the COVID-19 pandemic, a trend that will affect the insurance industry on multiple fronts.
One quarter of SMEs reported that remote working had increased since the beginning of the pandemic while 16% reported significantly increased levels.
Among these two groups, only one quarter expect remote working to revert to pre-coronavirus levels once the pandemic is over.
As employees remain at home, businesses will be using their office space less. According to research by Accumulate Capital, 73% of business leaders anticipate that UK businesses will downsize their offices in 2021, reducing the size of the commercial real estate market and subsequently the commercial property insurance market.
With working form home comes the possibility of a potential increase in the employers’ liability market if employees don’t have access to a proper workstation at home, leading to increased musculoskeletal strains and injuries.
Yasha Kuruvilla, Insurance Analyst at GlobalData, commented: “Remote working has indirect effects on businesses that provide goods and services to employees, such as restaurants and pubs. ‘Pret a Manger’ announced plans to close 30 locations and cut a third of its staff. Costa Coffee has also announced that up to 1,650 jobs are at risk. As businesses close locations due to decreased demand from employees, this will again shift the insurance landscape.
“Fewer physical locations will lead to reduced levels of property and public liability cover. However, as businesses start to shift their model – by increasing home delivery services, for example – there will be increased opportunities in other lines of business such as motor insurance.”