Coronavirus

Industry must adapt to rise in remote working, warns GlobalData

The rise in remote working will have “lasting consequences” on the insurance industry, GlobalData has warned. 

It comes as more than two thirds of SMEs in the UK now expect remote-working levels to be higher following the pandemic. 

One quarter of SMEs reported that remote working had increased since the beginning of the pandemic, while 16% reported “significantly” increased levels. 

In light of this, insurers now need to “adapt to changing times as remote working is here to say”, according to GlobalData.

According to its 2020 UK SME Insurance Survey, SMEs in the UK expect staff to work remotely following the Covid-19 pandemic, a trend that will reportedly affect the insurance industry on multiple fronts.

According to research by Accumulate Capital, 73% of business leaders anticipate that businesses will downsize their offices in 2021 following this shift, reducing the size of the commercial real estate market and subsequently the commercial property insurance market. 

In addition, claims in the employers’ liability market have the potential to increase if employees do not have a proper workstation at home, leading to increased musculoskeletal strains and injuries.

Yasha Kuruvilla, insurance analyst at GlobalData, said: “Remote working has indirect effects on businesses that provide goods and services to employees, such as restaurants and pubs. ‘Pret a Manger’ announced plans to close 30 locations and cut a third of its staff. 

“Costa Coffee has also announced that up to 1,650 jobs are at risk. As businesses close locations due to decreased demand from employees, this will again shift the insurance landscape.”

He added: “Fewer physical locations will lead to reduced levels of property and public liability cover. 

“However, as businesses start to shift their model – by increasing home delivery services, for example – there will be increased opportunities in other lines of business such as motor insurance.”

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