Adversity Shapes Conversations Between Underwriters and Clients

When entire industries face challenges brought on by crises, underwriters must continually investigate and communicate in order to assess and analyze risk for their clients.

(Sir Edmund Hillary and Norgay Sherpa.)

A crisis of such sweeping magnitude as the coronavirus pandemic causes operational and economic disruption in every industry in the world. How do businesses respond? How do they troubleshoot? And how can insurance providers help?

It takes communication from both businesses and insurance providers to find the answers. As crises of any kind develop, the nature and format of the conversations will adapt in response. In the case of the COVID-19 pandemic, communication evolved rapidly in order for Argo Group to assess clients’ risk mitigation efforts.

High-level questions being asked of clients

  • What impact is the COVID-19 pandemic having on your business?
  • What measures are being taken to reduce the possible spread of the virus within your operations?
  • If you are deemed to be an essential business, what does this mean in terms of the measures you are taking to protect customers?

The impact to clients varies. In some instances, reduced staffing, the need for social distancing and an increased reliance on technology have reshaped business models. In others, halting the production of goods deemed non-essential in order to manufacture vital equipment for the global relief effort has changed their exposures.

The swift changes that businesses implemented in order to maintain operations may have caused exposures for which they hadn’t previously accounted.

Having the ability to provide online/e-commerce options to customers quickly became a valuable asset for many business, including restaurants, grocers and retailers. These adjustments to operations could expose new risks that underwriters need to investigate and continually evaluate. For example, the increased use of company vehicles or third parties delivering products/services to customers.

It’s a challenging time for organizations as they face unprecedented obstacles. For underwriters, it’s an opportunity to explore the impact on various markets, evaluate risk and determine how a business might be affected in the long term.

From Argo’s casualty insurance perspective, affected industry classes include:

  • Transit/transportation (buses/rail/shipping)
  • Lodging (hotels)
  • Owners, landlords and tenants/real estate
  • Manufacturing
  • Meat/non-meat food processing
  • Cruise ships
  • Amusement/entertainment
  • Restaurants

The above listing speaks to the impact this pandemic can have on multiple industry groups. Being aware of this congregation issue is very important when looking at clients who may be involved in various industry classes. This unique position allows underwriters to share evolving best practices collected from multiple industries with clients.

Targeted questions identify internal exposures

In addition to a high-level view of response to COVID-19, Argo Group underwriters ask clients targeted questions to help identify and troubleshoot internal risk within organizations, including the following:

  • If you are assisting the U.S. government in any way associated with the COVID-19 pandemic, are you covered under government indemnities?
  • Can you comment on the use of contractors versus employees?
    • Are contractors properly classified as independent contractors versus employees?
    • Are they being used to replace employees who have been laid off?
  • Does the company have a robust communicable illness/disease policy, response and business continuity plan in place?
  • Does the company actively encourage sick employees to stay home?
  • What is the company’s return-to-the-workplace policy?
  • Does the company have a reliable system for real-time public communication with employees or customers?
  • Do the company’s employees work in close proximity with vendors/contractors or other strategic partners who may have employees who have greater potential to contract the disease?

Clients are responding to exposures by working from home or practicing safe distancing among co-workers where possible. They are also following federal, state, and local health guidelines and orders regarding, among other things, proper hand washing, sanitization and the use of personal protective equipment. Additionally, they’re enforcing communicable illness/disease policies by requiring sick employees to stay home and by performing daily temperature checks or health screenings prior to all shifts and entrance into buildings.

Some businesses may see long-term potential in the adjustments they make during crises and permanently incorporate them into their operations models. Others may face a greater struggle. By asking brokers and policyholders the right questions, underwriters can help a company mitigate risk during unexpected hardships and be part of the solution that allows a business to stay in business.

COVID-19 and Insurance Economics: Resilience and Risk in the Connected World

Raymond Tannock // Raymond Tannock joined Argo Insurance in 2019 where he currently serves as a casualty insurance underwriter. Prior to that he worked at Beecher Carlson as a broker and Chubb Bermuda and Allied World Assurance Company as an underwriter. He has 10+ years’ experience in the insurance industry in Bermuda and London. He describes himself as a highly enthusiastic and motivated individual, and he strives to bring that passion to each account he underwrites. He graduated magna cum laude from Hampton University with a Bachelor of Science in finance. Tannock obtained his CPCU and ARM designations and is currently working on his ARe designation. He can be reached at

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