'Return Risk' rears up as the world gets moving again
The world’s post-Covid return to travel, both near and long-distance, requires a careful re-examination of risks and exposures across the board.
Our universal wanderlust has been steadily increasing for decades, even centuries. An unprecedented 4.5 billion passengers hopped onto 38.3 million flights in 2019, up 3.6% and 1.7% respectively. Total passenger kilometres increased from five trillion in 2010 to just shy of nine trillion in 2019 – far enough to reach Jupiter 1.3 million times. Then, suddenly, global aviation was grounded.
Everything, everywhere came to a sudden halt when Covid-19 called an unprecedented halt to humankind’s deep-seated desire to move about. Today, tentatively in many places, the world is reopening.
People are beginning to move around again, and not just by air. From microjourneys to work on public transit to cross-country bus trips and even cruises on the high seas, our ability to travel for business and pleasure is beginning to return. But with that renewed mobility comes increased risk exposures. That makes it vital to revisit each client’s coverage and policies as we move into 2022.
Some exposures that went temporarily to zero will return to pre-pandemic levels swiftly, but others may never do so. Still other risks have multiplied, and could continue at higher levels. Brokers could consider offering every client a “return risk” audit that checks, forecasts, and quantifies specific levels of exposure in multiple areas. A prudent audit should consider:
Accident & Health
This is the class of insurance which includes travel cover for business personnel. It’s one of the areas that may not return to pre-pandemic levels, since many businesses are making a concerted effort to travel less frequently to reduce their carbon emissions, and lockdown made everyone Zoom.
Contact Jonathan Pooley
Kidnap & Ransom
The reopening of in-person international business affairs sadly means that the risk of executive kidnapping is back on the agenda in some places around the world. Specialist insurers are highly skilled in negotiating positive outcomes that minimise disruptions.
Contact Hannah Giles
Marine
As the world’s ocean fleet resumes its carriage of recovering global trade, marine and cargo risks – including inland marine risks – have roughly returned to pre-pandemic levels. Some trade in recovering sectors may now be delayed by supply shortages in the shipping and logistics sectors, but that’s not likely to last. Meanwhile on the high seas, even the pirates are back in action. Cover is essential.
Contact Alex Howard-Smith & Seema Pandey
Strike, Riot and Civil Commotion
With everyone back on the street, so too is the chance that people will take to the streets to make their point, perhaps wrecking your property or shutting you down as they rampage. ‘SRCC’ risks were rising world-wide before the pandemic, and are likely to reach similar or even greater heights as post-pandemic economic malaise touches nations around the world.
Contact David Eliot
Political Risks
The return to more normal economic activity means the resumption of major infrastructure investments abroad. Exposure to risks arising from government’s potential claims over foreign assets naturally rise with activity, and with mounting global political instability. You can’t be too careful with risks like confiscation of assets.
Contact Jessica Colbear
Terrorism and Active Assailant
Terrorism experts predict that as the world gets moving again, incidents of terror will return to pre-pandemic levels at least. Shooting rampages and other forms of mayhem are also likely to make an unhappy comeback.
Contact David Eliot
Event contingency
People are returning to festivals, games, concerts, weddings, and all sorts of big-audience events. Contingency insurance is as important as ever to protect against financial losses arising from unforeseen cancellation or abandonment. Communicable disease is likely to be excluded, but pre-pandemic perils such as torrential rain may be increasing with climate change.
Contact Carl Baxter
General Liability
As public places reopen and people venture out, the chance that visitors suffer an injury or another loss while on your patch also returns. As the courts reopen in parallel, so too does the likelihood that the public (or employees, passengers, patients, and other groups) will seek redress through litigation. Covid-19 didn’t displace the plaintiffs’ bar!
Contact Mark West
Whatever your clients’ pre-pandemic risk profiles looked like, they’re definitely different now, maybe radically. And as the world begins to get moving again, the risks they face will continue to evolve. Clients need enough of the right insurance to cover changed risks, but not more than that – especially as the market remains challenging.
We’ve already experienced increases in purchasing of coverages in each of the situations described and stand ready to support.
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