Insurers need to adapt policies as majority of UK consumers intend to continue working from home post-pandemic, says GlobalData

The vast majority of UK consumers believe they will continue to work from home for at least two days a week post-COVID-19, which will have long-term effects on a range of insurance lines, according to GlobalData, a leading data and analytics company.

GlobalData’s 2021 UK Insurance Consumer Survey found that only 19.1% of respondents believed they would be in the office for four or five days a week after the pandemic, compared to 53.2% of respondents who believed they would be in the office for two or three days a week. The survey was conducted in Q3 2021, and had 4,000 respondents, so over a year into the pandemic, which suggests consumers have a good idea of what their situations will be.

Ben Carey-Evans, Insurance Analyst at GlobalData, comments: “This isn’t necessarily bad news for insurers, but they will need to adapt several policies to fit the new climate. The challenge for insurers is that the working world has suddenly evolved by decades in the space of one event. This requires them to adapt quickly or risk losing customers across a range of lines. Flexibility is likely to be the key, but the cheaper premiums that come with it are also unlikely to suit insurers who are often facing increased risk – particularly in commercial lines.”

The most obvious issue for insurers is commercial property. So far, this line has seen premiums increase significantly since the start of the pandemic. However, this increase can be attributed to claims inflation.

Carey-Evans explains: “Rising premium prices will only make it harder for insurers to maintain customers, especially while fewer people are in offices. It is perhaps a line that insurers will need to be flexible in going forward, offering some companies flexible employee liability rates based on how many people are in the office on a particular day, for example.”

The same can be said for personal motor insurance policies. Commuting will be one of the main reasons for people having cars, and especially their mileage. Employees now working one or two days a week may want to retain their cars but are likely to feel they should be paying less than when they were driving to and from work every day.

Carey-Evans adds: “Insurers face more of a threat from competitors and start-ups here, as pay-per-mile car insurance is becoming more mainstream and fits perfectly with post-COVID-19 employees.

“Overall, consumer behavior has been transformed in the space of just a couple of years, and it will be a significant challenge for insurers to keep up. The key will be to be as flexible and digital as possible, and to increase contact with customers as much as possible.”