COVID-19 Comp Claims Far Less Than Anticipated


ileads insurance market minute

Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading Insurance Services Firms Well-Positioned For Growth: Report. This week we’re bringing you:


Growth of insurtech sector seen in IPOs, M&A*

The insurtech sector continues to attract funding as high-profile initial public offerings such as Duck Creek Technologies Inc.’s last August, which raised more than $400 million, provide momentum for the sector, investment and industry sources say.

Investors also see a path to profitability in strategic deals including Aon PLC’s January 2020 purchase of New York-based digital insurance platform CoverWallet and the emergence of new tools such as special purpose acquisition companies.

“We’re starting to see a lot of people being able to exit, and I think that’s one of the things that continues to drive new investment,” said Martha Notaras, managing partner at Brewer Lane Management LLC, a venture capital firm in Los Angeles.

Investors being able to “exit” an investment, to monetize profits through an initial public offering, strategic sale or other route, is one of the criteria considered at the outset of an insurtech investment, sources agree.

Insurtech investors have become more experienced and prudent, according to Marie Carr, principal of global growth strategy and U.S. financial services practice in Chicago for PricewaterhouseCoopers LLP.

Find out more in-depth here.


Holmes Murphy CEO shares “secret sauce” to 87-years of independence*

In the era of mass insurance brokerage and agency consolidation, what’s the secret sauce to remaining independent? For Holmes Murphy, an 87-year-old independent insurance brokerage which serve business and industry leaders nationwide, it’s all about culture.

The Waukee, Iowa-based firm describes itself as being “fiercely independent” and therefore free to “focus on client needs, solving problems and accelerating … collective success”. Its philosophy is to sell cumulative knowledge and experience that make insurance and businesses work better, not just to hand clients a piece of paper that says: ‘You’re covered for X, Y and Z’.

Off the back of a “strong” 2020 in which Holmes Murphy and its clients “weathered the [COVID-19] storm well,” according to chairman and CEO Dan Keough (pictured), the brokerage has just completed its latest strategic plan. This is something Holmes Murphy undertakes every five years in order to re-set “who we are, where we are, and where we’re going,” Keough explained.

“In an industry that’s consolidating, Holmes Murphy is a bit of a unicorn,” he told Insurance Business. “We’re growing and thriving independently, and we believe that our focus on top talent and employee ownership are key to our independence. Because we’re employee-owned, we’re able to control our own destiny and take more of a long-term strategic view with a ‘do what’s right for the client’ mentality. If we stick to that, we believe we have an opportunity to become one of the largest privately-held insurance brokerage firms in the United States.

Read more in-depth here.


COVID-19 comp claims far less than anticipated*

Workers compensation claims for COVID-19 last year were far less than the doomsday predictions made early in the pandemic, but experts are concerned that lingering symptoms and rebuttable presumptions in some states may negatively impact the industry going forward.

In November and December combined, the U.S. reported 11 million new COVID-19 cases, with insurers and ratings agencies seeing corresponding jumps in workers comp claims.

Matt Zender, Las Vegas-based senior vice president of workers compensation strategy for AmTrust Financial Services Inc., said comp claims in his book of business ticked up in the last two months of 2020.

California reported 15,000 claims filed in November and 32,000 in December — with year-end claims for those two months totaling nearly as many as filed in the other months combined since the start of the pandemic, according to data from the California Workers Compensation Institute. In September and October, CWCI reported fewer than 5,000 claims filed each month.

About one in six workers comp claims in California was attributed to COVID-19 in 2020, but just a small proportion of those claims required significant medical treatment or hospitalization, said Alex Swedlow, president of Oakland, California-based CWCI.

Find out more in-depth here.


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