An Advisors' Guide to Excess & Surplus Disability Insurance

Has COVID Impacted the Way We Look at Disability Insurance?

Posted Wed, Aug, 9th, 2023
By Exceptional Risk Advisors

The COVID-19 pandemic reshaped industries across the globe, and the disability insurance sector was no exception. As the world grappled with unprecedented challenges, carriers in this space were compelled to revolutionize their underwriting procedures and embrace unique work arrangements and digital solutions at a pace not seen before in this industry.

In terms of excess lines, coverage has also been impacted to a degree. For instance, if you look at medical insurance during the height of the pandemic, you would think that the medical insurance carriers got slaughtered, but the opposite happened. Nobody went out to go get their heart examined or followed through on their regular exams; they didn’t leave their house. The residual effect was that it was probably a most profitable year for those carriers.

There’s little doubt that the medical profession has been especially disrupted during the pandemic. First, there were certain classes of doctors that weren’t working during the pandemic, like orthopedic surgeons and plastic surgeons and oral maxillofacial surgeons, because no one was sticking their face in someone’s mouth for the first six months of the pandemic. Second, take the ER doctors and all healthcare workers that were on the frontline — not only could they not stop working, but many of them suffered from exhaustion, severe stress, and in many cases, this led to PTSD and depression. They were overwhelmed, overworked and overrun in the early days of the pandemic in certain major metropolitan areas. These factors were problematic for disability insurance carriers, and in many ways, we are still seeing the impact of these early traumatic days as this class of worker heals and recovers.

CASE STUDY: Key Person Disability of Chief of Cardiology

Although the numbers tell us that the pandemic is in the rear-view mirror for most of us, there are still residual effects that will likely impact the insurance industry down the road. One area where that is being felt is regarding the role COVID plays in professional sports in general, and myocarditis in particular, which is the inflammation of the heart muscle, particularly in young men ages 18 to 30. Case in point is former Red Sox pitcher Eduardo Rodriquez, who missed the entire 2020 season as a result of the disease, brought on by a bout with COVID. This is expected to be an ongoing conversation over the next few years.

NFL Disability Insurance Buying Selling Season Starts Now

There are clouds on the horizon, and it’s not yet known whether the skies will clear or if they’ll turn into a hurricane. What’s certain is that now more than ever is the time for advisors to have a conversation with their clients about income protection. The pandemic has shifted the earth beneath the insurance industry’s feet, and in a lot of ways we are all still struggling to gain our balance in an uncertain world.

This post was adapted from the published article as seen in Insurance Journal magazine written by Chris Lack, Partner at Exceptional Risk Advisors. You can read the full article here.