Overcoming the Challenges of COVID-19

August 2, 2021 by

COVID-19 has thrown the insurance industry a steady stream of curveballs. And while the pandemic’s effects on health insurance have been front and center, it’s worth mentioning that workers’ compensation insurance has been significantly impacted as well.

If you’re feeling lost in the chaos of constantly shifting priorities, new regulations, unpredictable profits and changing availability of coverage, you are not alone. This past year has forced brokers, carriers and employers alike to set aside everything they thought they knew and re-examine how to approach workers’ compensation.

But with these challenges comes tremendous opportunity if you know where to look. By understanding how the pandemic has changed the workers’ compensation game, collaborating with industry partners, and educating your clients and prospects, you’ll be in the best position possible to overcome the challenges of COVID-19 and emerge successful.

A Changing Marketplace

The pandemic has severely interrupted the operations of numerous small businesses, creating a ripple effect that has changed the workers’ compensation insurance industry as a whole.

Because the basis of workers’ compensation premiums is payroll, any decrease in payroll or canceled policy will impact your book of business. Employers, carriers and you — as a broker — are having to adapt to shrinking revenues in the short-term.

Additionally, the flow of new business opportunities has been interrupted. Existing businesses are thinking twice about expanding their operations, so their need for workers’ compensation coverage has stagnated. Further, many individuals who were considering starting a business are more apprehensive to do so in this uncertain time. And in the case of businesses that already have some type of coverage, decision-makers are more hesitant to make changes, making it harder to win over new clients.

On top of all that, there is also the challenge of navigating shifting rules and regulations — in terms of pandemic-related policies as well as the changing rules on coverage for contractors. Keeping up with the constant flow of information and requirements has proved difficult for both employers and their brokers.

The pandemic has significantly impacted carriers, too, resulting in a mindset shift that has important implications for brokers. Carriers are seeing record numbers of COVID-19 claims, many of which are substantial and compensable. As a result, carriers are taking a closer look at certain industries to ascertain their estimated COVID-19 risks, potentially limiting future carrier choices for some clients.

With these challenges in mind, it is up to brokers to find ways to navigate the changing marketplace, identify the right business opportunities and lead their clients through the obstacle course of workers’ compensation.

Collaborate With Carriers

During these difficult times, effective collaboration makes all the difference. By working closely with carriers, you’ll be better able to identify ways to provide relief to your clients. Carriers are often willing to offer solutions, such as payment plans or payroll reductions, to help businesses that have been impacted by the pandemic.

As carriers reassess each industry based on its potential for COVID-19 claims, make sure you understand how your clients may be affected. Do your research in advance to be able to recommend different carriers to clients that need a new solution. To expand your options, consider partnering with a general agency that has already formed strong relationships with a variety of workers’ compensation carriers.

Finally, be sure to advise your clients that they should promptly report any potential COVID-19 claims to the carrier. This proactive approach will make life easier for everyone involved.

Take Advantage of Opportunities

While many would-be business owners are hesitant to start a new venture during the pandemic, don’t give up hope on finding new clients just yet. COVID-19 has illuminated the need for new products and services, and it even seems to have brought out the entrepreneurial spirit in some people.

As we strive to adapt to working remotely, learning from a distance, exercising at home, entertaining ourselves without gathering and countless other pandemic-related changes, the door has opened for new, innovative businesses to thrive.

There has been a surge in new businesses opening in the technology, healthcare, service and consumable goods sectors. And the real estate, construction and finance industries have held their own through the pandemic.

Though some businesses are shutting their doors and reducing their staff, other companies are thriving. Focus on supporting your existing clients to help those who may be struggling, and concentrate your new business efforts on industries that are growing in the current environment.

Keep your eyes open for opportunities, and be ready to beat your competition to the table.

Communicate With Clients

With so much changing so quickly, good communication is more important than ever. By serving as a trusted resource for your clients and prospects as they face new challenges, you gain an opportunity to reinforce relationships and build loyalty.

Reach out to your existing clients to determine the impact the pandemic has had on their business. Help them understand how their workers’ compensation needs may have changed, and ask questions to better understand their unique obstacles. Propose solutions to help them ensure they have sufficient coverage and/or save money on their policy.

‘The pandemic has severely interrupted the operations of numerous small businesses, creating a ripple effect that has changed the workers’ compensation insurance industry as a whole.’

When connecting with potential new clients, educate them about the options available to them. Share how workers’ comp premiums are determined to reassure them that they will only be charged a premium based on their payroll.

Choose the Right Partner

If this all feels like a lot of work, don’t worry. You don’t have to do it on your own. We all accomplish a lot more with teamwork, and partnering with a general agency is a great way to get some of the stress off your shoulders. A general agency can help you answer client questions, coordinate with carriers, handle day-to-day service requests, manage the claims and audit processes, deliver risk management resources and more — freeing up more time for you to focus on growing your business.

So how do you know you’re choosing the right partner? Look for a general agency that specializes in workers’ compensation. Depending on what other types of insurance you sell, you may want to select an agency that has expertise that complements yours.

Additionally, make sure your general agency fully understands the needs of your clients, and offers proactive solutions to the challenges you and your clients face.

Keep in mind the growing importance of technology and digital solutions, and seek out a general agency partner that offers technology tools to help streamline operations, improve efficiency and offer added convenience.

Another key characteristic to look for is strong carrier relationships. You will want to partner with a general agency that has access to a variety of workers’ compensation carriers and works closely with those carriers to pass along resources and information to you and your clients.

Finally, be sure to look for a general agency that is dedicated to supporting your success. This type of agency will offer responsive, high-touch service and even provide resources like education and training opportunities to help you grow as a broker.

With the right partnerships, a keen eye for opportunities, clear client communication and effective carrier collaboration, you’ll be on track to conquer the challenges of workers’ compensation insurance — both during the pandemic and for years to come.