COVID-19's Impact on Insurance Companies: Challenges, Responses, and Strategic Solutions
Overview
This paper reviews Batistoni and Croarkin's analysis of COVID-19's impact on the insurance industry, examining challenges including reduced premium payments, market instability, and pandemic-related compensation pressures. The author agrees with their assessment while offering critical commentary on proposed solutions, particularly disagreeing with legal contract modification approaches in favor of customer-centric retention strategies.
What this essay covers
- Summary of Batistoni and Croarkin's article on pandemic impact on insurance sector
- Analysis of challenges: income reduction, investment portfolio losses, government policy effects, and compensation claims
- Author's critical evaluation and alternative recommendations including loan acquisition, leniency plans, and customer care strategies
Preview
Review of an Article
Name
Institution
Review of an Article
In the article, ‘Impact of COVID-19 on Insurance Companies’ published on April 09, 2020, on the EisnerAmper website, Dianne Batistoni and Kenneth Croarkin address the impact of the virus on insurance. Batistoni and Croarkin suggest that the outbreak of the virus has hit the economy of several nations, and they argue that the insurance industry currently faces several hiccups and is at risk of downfall. These authors claim that the responsive actions taken by these companies will significantly determine the future of the insurance industry. Furthermore, they state that the companies depend highly on other firms and markets to accrue their revenue from investment portfolios. The authors write that markets have been profoundly affected due to the pandemic as most industries are slowing down or closing down. Moreover, the authors emphasize the prospective decrease in interest rates from company revenue streams. The authors continue to state that the government policies implemented during this period have affected the insurance industry. Regulations have been introduced to ensure that insurance companies accept late payments due to the state of the economy (Croarkin & Batistoni, 2020). Although the companies continue to compensate their clients, they have been warned against imposing penalties on their clients. Furthermore, Batistoni and Croarkin state that due to the Covid-19 pandemic, actuaries and insurers face a reduction in incomes. The premium payments have reduced since most industries are now resorting to downsizing, and most workers are taking leaves.