COVID-19 Impact Analysis Summary
Update as of Date 23 June 2020
With the risks of the pandemic nowhere near being subdued and a real opportunity for COVID-19 case rates to increase in states that have re-opened, this Winston Churchill quote perfectly summarizes where the US stands today in its fight against COVID-19, “Now, this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” Below we highlight a few high level developing COVID-19 topics that have caught our eye since the last update was released.
February 29th, 2020 was the day the US experienced its first death due to COVID-19 and, for the following 96 days until June 4th, individual states were not responsible for keeping records of sickness and death from COVID-19 based on age, sex, and race/ethnicity. Additionally, with no formal definition of what constitutes as an “essential worker” or “essential industry” in America, it has been, and will be, hard for regulators, businesses, and (re)insurers alike to prioritize safety and determine the cost and eligibility for possible pandemic-specific benefits such as: additional equipment, insurance, sick leave, hazard pay, and other protections provided for Americans today. This is important to note for the (re)insurance industry, because without the proper definitions and statistics, the industry could unknowingly misclassify risks leading to disputes and/or future adverse development within their books of business. For more information about the uncertainty of data and definitions regarding COVID-19, find the link below for the Brookings Report under External Resources.
In June the United States Census Bureau (USCB) released multiple economic indicator reports that highlight the impact COVID-19 has had on the US economy thus far. Starting with the positive, in May the Advanced Monthly Retail and Food Service Sales report revealed the largest monthly gain in US retail and food service sales history of 17.7%. Although the sharp monthly increase is positive, the rebound only partially recovered the losses experienced earlier this year, leaving consumer spending down about 6% year-over-year (YOY). A deeper analysis of the monthly retail and food sales data can be found in Exhibit 5 of the BMS Impact Analysis below.
The USCB also released first quarter selected service revenues in which we found statistics that support the premise that the current economic downturn is likely being led by the Health Care Service Industry as highlighted in Exhibit 7 of the BMS Impact Analysis below. Overall, the sector has experienced a 5.3% decrease in total revenue from the fourth quarter of 2019 to the first quarter of 2020. Furthermore, a substantial side-effect of the pandemic is that many Americans, including those with chronic conditions, are delaying care. In a study completed by Strata Decision Technology, linked below under External Resources, the study reveals that US hospitals are losing close to $60 billion in revenue per month. The losses are likely due to, but not limited to, a 54.5% average decrease in the number of unique patients seeking care in a hospital setting across all service lines in America. Additionally, the volume of health screenings and preventative wellness visits that are designed to provide early detection has decreased significantly, therefore increasing the risk of undiagnosed illnesses and the US health debt.
Health debt, unlike financial debt, manifests from a lack of care: skipping screenings, delaying elective procedures, or not taking medications, and will likely be one of the next areas that adversely impacts the (re)insurance industry. The emergence of the US health debt is a direct short and long-term result of fewer patient encounters at hospitals across the country. As more Americans delay procedures and tests due to COVID-19, the anticipated second wave of cases could come sooner and result in more complex, traumatic, and costly procedures due to personal protective equipment requirements for medical professionals treating those patients with chronic or critical underlying conditions. For health (re)insurers, the increasing health debt situation in America is likely to put further strain on the bottom line due to the expected increase in the severity of health claims. For the full weekly report on US health debt, navigate to the Strata National Patient and Procedure Volume Tracker link under the External Resources section below.
The fight surrounding business interruption (BI) continues to inch forward as (re)insurers fight a consolidation of more than 100 federal lawsuits, arguing that each policy is too unique to make a broad, overarching decision. Meanwhile, California and New Jersey have mandated all (re)insurers, both admitted and non-admitted, who produce policies in each respective state to refund or rebate premiums to policyholders that have been affected by COVID-19. Additionally, the NAIC has issued a data call for all US property & casualty insurers that wrote BI coverage in 2019 or 2020. The data call made by the NAIC will assist state insurance regulators in analysing the financial condition of commercial insurers to understand which insurers are writing business interruption coverage, the size of the market, the extent of exclusions related to COVID-19, and claims and losses related to COVID-19. The data call was issued amidst the introduction of retroactive BI coverage bills in multiple states and BI-related federal legislation increasing the pressure on (re)insurers to possibly pay BI losses despite contract wording.
Looking forward internally, the (re)insurance industry is likely to continue down the path of digital transformation. Highlighted in the article linked below titled, “The COVID-19 Recovery will be Digital”, recent data shows that US businesses and consumers have vaulted five years forward in the digital transformation process. Insurers should note that now around 35% of policyholders complete their insurance tasks online, which has increased from 27% at the start of the pandemic. Predicting what will be the next big impact made by COVID-19 on the (re)insurance industry is nearly impossible, but even if the industry is really at the end of the beginning of the pandemic, it’s valid to say that the industry is in a new phase where rapid change is driving new opportunities for those (re)insurers agile and innovative enough to recognize and capitalize on them. For your convenience, we have listed some of the resources that helped create this summary below.
BMS COVID-19 Content
BMS COVID-19 Impact Analysis
Built by the BMS COVID-19 Impact Analysis team, the file embedded below is an additional resource to supplement the summary above. The file has been built to track and visualize the various ways that COVID-19 has impacted the world overtime and is updated with every release.
BMS Tropical Update
Back in early May, Andrew Siffert highlighted that trouble was brewing for the 2020 Atlantic Hurricane Season. In that BMS Insight, he outlined the climate forces that point towards an active season which could further stress an industry dealing with the impact of the ongoing COVID-19 pandemic.
External Covid-19 Resources
The Brookings Report
As the COVID-19 pandemic continues, America’s frontline workers are still valiantly reporting to their job sites and risking their personal health to keep the economy in motion and the rest of us safe. But to adequately protect these workers, their households, and the communities where they live, employers, policymakers, and other leaders must first agree on exactly who the frontline workforce is.
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.
COVID-19 Recovery will be Digital
The rapid migration to digital technologies driven by the pandemic will continue into the recovery. Here’s how to accelerate your organization’s digital capabilities to keep pace.
NCCI Regulator and Legislation Activity Report
This report includes key COVID-19 related legislation, regulations, bulletins, executive orders, and other relevant activity.
NCCI COVID-19 WC Presumptions Report
This report includes state regulatory and legislative activity related to COVID-19 workers compensation compensability presumptions.
NAIC Additional Accounting Guidance for Pandemic- Affected Insurers
The National Association of Insurance Commissioners (NAIC) is continuing to offer statutory accounting guidance to insurers affected by the COVID-19 pandemic. On May 5, the NAIC’s Statutory Accounting Principles Working Group (SAPWG) exposed five pronouncements for public comment. The first four are interpretations of existing Statements of Statutory Accounting Principles (SSAPs), and the last is an agenda item.
Property and Casualty Insurance Commentary
Bill Wilson CPCU, ARM, AIM, AAM, who is revered by many as “an expert when it comes to insurance” and his team create commentary (an expression of opinions or offering of explanations) daily based on pertinent topics throughout the industry. This website is a great resource to follow during the pandemic for any individual in the (re)insurance industry.
For those who would like to listen to the commentary rather than read, Bill and his team also have a great Podcast that highlights the technical and legal issues regarding insurance coverages affected by the coronavirus pandemic.
NAIC Coronavirus Resource Center
The National Association of Insurance Commissioners (NAIC) has established this resource page to assist the public, business community, and insurance professionals in understanding and managing the risks of the current outbreak of COVID-19, commonly known as Coronavirus. Find state actions taken in response to the COVID-19 pandemic that impact insurance. Use the category menu to search by insurance topic and further sort by state, type of action, and/or line of insurance.
State Insurance Departments Issue Guidance to Life and P&C Insurers Concerning COVID-19
Compiled by Faegre Drinker, the link includes a list of all the state insurance departments’ guidance, policy cancellations, and limitations enforced upon insurers.
Dashboards updated in real-time
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
BlackRock Macro Dashboard
This resource is geared towards the growth, financial conditions, inflation, and trade of the global economy rather than the medical impact. Follow along in real time to see the impact COVID-19 has had on the global economy.
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.
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.
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.