Top Concerns for Insurance Carriers During the COVID-19 Pandemic
As the COVID-19 pandemic has swept the world, insurance carriers are beginning to feel the effects on all aspects of their business. Consumers are faced with potential liquidity issues, and at the same time, states are asking (or in some cases, requiring) insurance carriers to aid in the mitigation of a potentially larger financial crisis.
Some of the top-of-mind business issues that insurance carriers are facing include:
- Internal Controls for a Remote Workforce. Insurance carriers will be forced to adjust policies to align with state and local regulations, which in turn may require adjusting internal policies to accommodate an employee base that is working from home. This is requiring the company to implement new processes to supervise remote teams and employees and adjust workflows to accommodate the changing circumstances and challenges that everyone is facing right now.
- Managing Third-Party Administrators and Other Outsourced Providers. Insurance carriers, unlike many other industries, rely less on supply chains; however, many carriers are heavily dependent upon third-party administrators and other outsourced providers to deliver on services essential to the insurance carriers’ operations. Carriers should be considering the impact the pandemic is having on service providers and prepare now for the implementation of more robust business plans. Some service providers may be in harder hit areas of the country, causing more disruption than anticipated to an insurance company. Insurance carriers should perform an assessment of service providers including those involved in IT, customer contracts, premium/claims processing, payroll, custodians and more.
- Cash Flow Management. Predicting cash flow in a time where regulators are requesting insurance carriers to be laxer about their policies for maintaining coverage while continuing to pay claims is now the new norm for many companies. Predictive analytics and cash forecasting are more crucial than ever.
To learn more about IT solutions, process engineering and how to model cash flow projections, please contact Alan Fine, Tax Partner and Insurance Industry Group Leader, at 314.983.1292 or firstname.lastname@example.org; Todd Goldenhersh, Audit Partner, at 314.983.1205 or email@example.com; or Amy Ribick, Advisory Partner, at 314.983.1347 or firstname.lastname@example.org.