October 15th, 2020 Analytics, Covid-19, U.S. Property & Casualty

COVID-19 Impact Analysis Summary

Update as of Date 15 October 2020

As Americans plan for their eighth month living during a global pandemic, new consumer behaviors, work and family routines, and driving patterns are being established, even though much remains uncertain and subject to rapid change. Lawsuits based on harm caused by COVID-19 have been filed and are starting to proceed through the judicial system. The United States’ economy appears stable, but the election may affect this outlook. Below, the BMS Group COVID-19 team has summarized how COVID-19 continues to impact our world.
Initially, it appeared most U.S. courts summarily dismissed the majority of COVID-19 business interruption cases. Last month a Missouri federal court ruled that a suit brought by a hair salon and a restaurant business owner against their insurance carrier properly alleged claims for coverage of losses caused by the coronavirus pandemic. The Court denied the insurer’s motion to dismiss, allowing this case to proceed and for the parties to begin formal discovery.
In August, in what is believed to be the first “take home” lawsuit, a meatpacker’s daughter claimed her mother died of COVID-19 after her father contracted it while working at a meat processing plant. The lawsuit claims the Aurora, Illinois-based company knew it had a coronavirus outbreak at its facility and failed to warn employees or adopt any infection prevention measures. Shortly following this lawsuit filling, a second Illinois suit followed, alleging that the wife of a parts assembler contracted COVID-19 from her husband resulting in devastatingly “serious injuries to multiple organs.” The plaintiff alleges she became ill while caring for her husband.
The “causal chain” will be the issue for plaintiffs to prove. Plaintiffs will be required to demonstrate that businesses failed to implement safety measures which led to worker illness and subsequent infection of a family member. A plaintiff will also presumably have to show that he or she took precautions to prevent becoming ill from other sources.
If successful, plaintiffs would not be subject to the caps on liability that employees currently face under the workers compensation system. The family members bringing suit are not company employees. “Between 7% and 9% of the roughly 200,000 U.S. COVID-19 deaths so far are believed to stem from take-home infections and the lawsuits could cost businesses up to $21 billion if the number of Americans fatalities reaches 300,000, according to Praedicat.
The theory of liability in these “take home” suits echoes from the 1990’s cases of asbestos litigation which also avoided caps on liability for workplace injuries, exposing businesses to costly pain and suffering damages, even though the plaintiff never set foot on their premises. “In 2013, a California jury awarded Rose-Marie Griggs $27.3 million in compensatory and punitive damages after she contracted mesothelioma that her lawyers argued was caused by asbestos fibers carried home in the 1950’s on the work clothes of her then-husband, who installed insulation for an affiliate of Owens-Illinois Inc.”
Although it is currently believed to be difficult to prevail in these “take home” cases, they may ultimately result in significant damages and are a legal trend to watch. There has been a consistent increase in social inflation caused by higher jury awards and a more liberal treatment of claims by workers compensation boards. These factors may affect the outcome of COVID-19 “take home” litigation. Furthermore, if plaintiffs began experiencing success in these cases, there may be a corollary effect on insurer loss adjustment expense. Representing asbestos victims has proved extremely profitable for lawyers. It is estimated that legal expenses consumed roughly 60% of asbestos compensation during the 1990’s. Even though it is unlikely that “take home” cases will reach asbestos levels, there is likely to be some adverse effect in the form of increased litigation cost for both companies and insurers.
The outcome of “take home” litigation may also impact the workplace. The CDC is urging people to get the flu vaccine this year to help reduce health risks for individuals, while also helping to conserve the country's potentially scarce healthcare resources. As employers seek to balance their duty to provide a workplace free of recognized dangers while maintaining the rights of individual employees, questions abound: Can an organization enforce mandatory vaccination policies? If an organization does require flu shots or COVID-19 vaccinations, what specific risks and responsibilities must they consider and address? Is a mandatory vaccination policy the right option for companies? If insurers based premiums on vaccination rates, employers will have an incentive to consider mandatory vaccinations. This area is still developing.
Although we remain in unprecedented times, several optimistic economic indicators are present. Global manufacturing hit a two year high at the end of the third quarter. The J.P. Morgan Global Manufacturing Purchasing Managers’ Index rose to 52.3 in September, the highest reading in 25 months, from 51.8 in August. An index above the neutral 50.0 mark indicates expansion.
Another sector that is presently invigorated is the housing market, thanks to record-low mortgage rates and consumers seeking to exchange city life for suburbia. However, unlike the housing market, commercial real estate has seen more selective positive outlooks, with grocery stores, pharmacies, and warehouses that cater to e-commerce thriving, while shopping malls, hotels, and office buildings are struggling. A recent uptick in online shopping, combined with an increased remote workforce, has decreased the demand for office space in the commercial real estate sector. Federal Reserve chair Jerome Powell noted many commercial real estate firms are unable to take advantage of low interest rates to borrow more money due to legal obligations in their debt covenant agreements. That means that some businesses are unable to fully take advantage of low interest rates, unlike homeowners who can more nimbly refinance their homes
In light of the immense loss of life caused so far by the pandemic, it is difficult to characterize the virus as having a silver lining. However there have been some economic benefits, albeit mixed with negative outcomes. The pandemic will not instantly disappear and it realistically will be part of our lives well into 2021. BMS Re will keep monitoring developments and keeping you informed.

Covid-19 Resources

For more information and access to the articles that assisted in creating this COVID-19 Impact Analysis summary please refer to the resources linked and or embedded below.


Dashboards updated in real-time

National Patient and Procedure Volume Tracker Report
A new analysis from data scientists at Strata Decision Technology (Strata) using the company’s newly launched National Patient and Procedure Volume Tracker™ reveals that hospitals are experiencing significant volume drops in key service line areas.

National Patient and Procedure Volume Tracker and Report Weekly Update.pdf


Facebook’s Good Mobility Dashboard

A mobility dashboard that aggregates information on people's movements from a conglomerate of private companies, as well as public resources like satellite imagery and census data to compare movement trends across different states dating back to March.

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Apple Mobility Trends Dashboard
Apple has released a mobility tracker that uses data from Apple Maps to show how much people's movements have decreased. Apple's report allows for comparisons of country-wide data, as well as data from some major cities.

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Google Mobility Reports (National, State, and County Level Data Available)
These Community Mobility Reports aim to provide insights into what has changed in response to policies aimed at combating COVID-19. The reports chart movement trends over time by geography, across different categories of places such as retail and recreation, groceries and pharmacies, parks, transit stations, workplaces, and residential.

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Rt.live State by State Infection Rate Tracker
A website dedicated to tracking how fast COVID-19 is spreading across each state in the US “Rt” has been a commonly used metric during the COVID-19 pandemic. It measures the average number of people who become infected by an infectious person. The higher the Rt is above 1.0 for a state, the quicker the virus is spreading. When Rt is below 1.0, the virus will stop spreading.

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Health and Medical Lifeline – FEMA COVID-19 Risk Model
Powered by Geospark Analytics, this model assess every US County’s seven day virus spread and the undersupply risk (number of hospitals, beds, and ICU beds). This is a great tool for insurers wondering how hard a specific county has been hit by COVID-19. General extrapolations about reopening economies can be made by understanding the undersupply risk and virus spread numbers.

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Impact on Foot Traffic
The interactive graph is updated periodically by SafeGraph, providing an opportunity to see how COVID-19 has impacted foot traffic patterns to public places such as restaurants, bars, airports, and grocery stores.

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Homebase’s State of Hourly Work
The spread of coronavirus (COVID-19) is having a devastating impact on small businesses and hourly workers. Homebase, is in a unique position to see this happen in real-time. In the interest of transparency, they are sharing data publicly, so that governments, businesses, and communities can understand and support the people who are most impacted. In addition to daily updates to the datasets, Homebase is surveying workers​ to understand their experiences and actively refreshing lists of ​financial resources for small businesses​ and employees​ to help people affected by COVID-19 quickly get relief.

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COVID Coverage Litigation Tracker
UPenn’s Insurance Law Analytics (“ILA”) conducts empirical research on insurance litigation to inform the resolution of insurance disputes and the development of insurance law. The COVID Coverage Litigation Tracker (CCLT) is ILA’s first research project. CCLT contains data on insurance coverage cases related to the COVID-19 pandemic. The data collected for each coverage case include policyholder name and industry code; insurer name and AM Best number; policyholder and insurer law firms; the court in which the case is litigated; the coverage sought; the type of insurance policy and state of issue; the relevant insurance policy forms; whether class action status is sought and, if so, the alleged class or classes; and information regarding key litigation events.

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Arrivalist’s Daily Travel Index
Measures consumer road trips of 50 miles or more in all 50 U.S. states. The data is drawn from a panel of GPS signals representing road trips taken by car. The insights have been prepared to help travel marketers and other industry professionals gauge fluctuations in drive market trips in any of the 50 U.S. states.

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Chris Murray Model
Referenced in a White House press briefing as the "Chris Murray Model," the Institute for Health Metrics and Evaluation’s (IHME) COVID-19 projections show demand for hospital services in each state. The demand for these services is expected to exceed capacity in most states.

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PwC’s COVID-19 Navigator
PwC’s team of specialists collaborated to create a digital assessment to help you understand the potential impact to your business and gauge your readiness to respond. The digital tool contains 3 sections of questions that will help you understand where your company stands as you respond to COVID-19 in the areas of: crisis management and response; workforce; operations and supply chain; finance and liquidity; tax and trade; and strategy and brand.

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John Hopkins University Global COVID-19 Dashboard
This resource has the latest medical numbers for COVID-19 cases, deaths, recoveries, and more — and it’s all sorted by country and/or state and province. Importantly, it also updates in real-time, so you always know you are getting the latest numbers.

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St. Louis Federal Reserve’s COVID-19 Economic Indicator Dashboard
A dashboard for monitoring the economic conditions in the U.S. economy, with a focus on the impact from the COVID-19 pandemic. St. Louis Fed will continue to add indicators to this dashboard as the situation develops.

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COVID-19 Retail Impact Tracker by Placer.ai
Follow in real time how foot traffic has changed to your favorite grocery store, retail store, restaurant, or pharmacy as the number of confirmed COVID-19 cases increases.

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COVID-19 Retail Pulse Survey by SalesPro
Like the dashboard above, this dashboard relies on survey feedback from retail giants like Target, Sam’s Club, Office Depot, and more to create visualizations regarding the impact of COVID-19 on their stores with categories such as: store status (open/closed), inventory levels, and customer engagement.

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COVID-19 Infection Curve Interactive Graph Presented by Our World in Data
The interactive graph is updated every day to show the progress of countries around the globe and their efforts to flatten the curve of COVID-19 infections.

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