Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading Work-From-Home Claims Examiner’s Injury Likely Compensable: Court. This week we’re bringing you:Data Breach At Insurer Affects Up To One Million Customers
Move to remote work has a bearing on workers’ compensation coverage*
The coronavirus pandemic has upended the way we work. In the US, 97% of respondents to a recent Global Workplace Analytics survey said they were working at home during the pandemic, while 82% of office workers (approximately 75 million US employees) reported that they wanted to continue to work from home even after the pandemic is over.
In light of this trend, employers need to know that the move to remote work has a bearing on their workers’ compensation insurance, and how their employees are classified and covered. According to the National Council on Compensation Insurance’s (NCCI) Classification Codes and Statistical Codes Manual, “For purposes of Code 8871, a residence office is a clerical work area located within the home of the clerical employee. Additional requirements are that the residence office must be separate and distinct from the location of the employer. In the event, an employer operates a business from a residence and the employer has clerical staff at the employer’s business location residence, these clerical employees are classified to Code 8810.”
Comp insurers face the threat of premium declines, rate pressure*
A sharp drop in direct written premium, low-interest rates, and continued negative premium rate pressure are likely to create challenges for workers compensation insurers in the next few years, experts say.
Although early dire forecasts of pandemic-related effects on the comp line have not transpired, COVID-19 uncertainty could add to those difficulties, they say.
“2020 is an unprecedented year in the roughly 110-year history of workers compensation,” said Robert Hartwig, clinical associate professor, and director of the Risk and Uncertainty Management Center at the University of South Carolina in Columbia. “Even to this day, we’ve recovered only about half of the jobs” lost when the country went into lockdown in March.
“Some of the lessons here are not going to come from historical insurance data, they’re going to come from economic experience and economic expectations,” he said.
While worker’s compensation remains highly profitable, pricing trends have put pressure on the line, said James Auden, Chicago-based managing director of insurance for Fitch Ratings Inc.
Data breach at insurer affects up to one million customers*
One of Sweden’s largest private insurers accidentally allowed several tech giants to gain access to private data in a breach that affected up to one million customers, according to a Bloomberg report.
Folksam Group, which oversees about $50 billion in insurance assets, said Tuesday that it had inadvertently shared client data with Google, Facebook, LinkedIn, Microsoft, and Adobe. The breach was discovered during an internal audit, Bloomberg reported.
“We understand that this can cause concern among our customers and we take what has happened seriously,” Folksam said in a statement. “We have immediately stopped sharing this personal information and requested that it be deleted.”
The insurer, which is a major investor in several of Sweden’s biggest companies, said the breach occurred as it was trying to give its customers customized offers.
“But unfortunately, we have not done it in the right way,” Jens Wikstrom, Folksam’s head of marketing and sales, told Bloomberg.
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