The impact of Covid-19 on motor insurance
This year is a year like no other, the world has been thrown into turmoil by the Covid-19 pandemic and it seems to be here to stay, for now, affecting how we live and work. This has not only impacted our personal lives but the insurance industry as well. The nature of insurance risk is changing, the industry is facing newer and increasing risks that can be linked to our “new normal”. This change is making insurers relook traditional insurance policies.
Today’s reality is that more and more people are working from home or staying at home to help stop the spread of the virus. This has resulted in fewer cars on the roads. There are actual studies that have been conducted that prove that since the start of this pandemic and the resulting lockdown restrictions people are actually driving less. During the height of the lockdown insurers received fewer motor related claims compared to before the lockdown restrictions. This led to some insurers, like Santam, to offer their policyholders with active policies a 20% discount in their premiums during the month of April.
It seems this “new normal” or way of working is here to stay and it is changing the insurance landscape. Home offices have created new access for cyber criminals, occupied homes have decreased the risk of home robberies for some.
Many believe some degree of home working will remain a permanent fixture when the virus begins to fade into obsolescence which means the industry has to change with the times and cater to the changing needs of the consumers.
Some insurers have introduced offers like usage-based motor insurance or benefits like distancebased rating. These offers or benefits enable policyholders to get discounts on their premiums based on the kilometres that they drive.
Franco Fer is, Santam Namibia CEO said, as a result of the COVID-19 pandemic the company has noticed significant changes in the daily routines of Namibians, along with taking new approaches to managing personal finances.
“We have seen fewer vehicles on the roads, with less exposure to everyday risks. In response to these changing circumstances and the evolving needs of our clients, Santam launched the distancebased rating benefit that will bring significant savings on our policyholders’ vehicle insurance premiums. In an effort to keep pace with innovation and delivering on our promise of Insurance Good and Proper, this new benefit is a practical solution to address the changing needs of our clients”, he said.