Commercial insurance shifts post-COVID with new strategies

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Since the onset of the COVID-19 pandemic, significant changes have occurred in the commercial insurance sector.

“The pandemic taught us that agility is key,” said Jason Mull, Western New York employee benefits sales leader at Brown & Brown. “Businesses with adaptive insurance strategies recover faster from disruptions. Our customers want and need innovative solutions to meet the needs of their diverse workforce and contain costs.”

Mull says the pandemic underscored the need for agile, employee-centric insurance solutions and prompted businesses to rethink their insurance needs and risk strategies.

“Businesses are prioritizing comprehensive health plans to meet the needs of their diverse workforce now more than ever,” Mull said. “They are emphasizing mental health services, telehealth, primary care and surgery concierge services, chronic disease management and wellness programs to address employee needs.”

Mull says businesses are also offering multiple health plan designs and ancillary coverages to make their benefits offerings more competitive to attract and retain top talent. Also, educating employees about these resources has become a priority for businesses.

“Leave no stone unturned when you are evaluating your employee benefits offerings,” Mull said. “The medical and pharmacy trends in this market have doubled over the last few years for most employers, regardless of their size. That, coupled with a lack of insurance carrier competition, means we must consider everything to help contain costs.”

Mull says this includes looking at all funding arrangements, collective purchasing opportunities, carrier and third-party administrator networks and discounts, pharmacy benefits managers and concierge services to provide employees and their families with the support they need to navigate the complexities of the healthcare system.

Post-pandemic, Mull has also found that businesses are showing more awareness and concern around policy exclusions.

“Businesses are more vigilant about policy exclusions, particularly for pandemics and business interruptions,” he said. “Post-COVID litigation and claim denials have heightened scrutiny, prompting customers to demand clearer policy terms and broader coverage to avoid gaps.”

He notes that businesses are now integrating predictive analytics to identify risks early, allowing agents to tailor coverage for emerging threats like cyber incidents or supply chain disruptions. Mull has also seen that customers are pushing for more transparency in policy language than they did pre-pandemic.

In terms of how the role of advisors has changed since the pandemic, Mull says they have evolved into that of a comprehensive solutions provider for customers.

“We want to bring innovative solutions to the forefront for them to consider,” he said. “We are committed to educating customers about emerging risks, legislative and regulatory compliance, marketplace trends, local and national benchmarks.”

He says advisors are also further leveraging data analytics to optimize benefits and to create plans for diverse workforces.

“Virtual consultations and proactive communication are now central to customer relationships,” Mull said. “Digital tools have transformed our advisory process, enabling real-time plan comparisons and virtual workshops to educate customers on benefits optimization.”

Cynthia Bostley, CIC, CRIS, senior risk management advisor for Haylor, Freyer & Coon / Alera Group, says COVID 19 was devastating for many businesses. She’s now finding her clients are much more diligent on drilling down into specific limits and coverages and duration of coverage, to ensure adequacy should another pandemic occur.

“COVID-19 not only exposed vulnerabilities for companies but drove increases in material costs and created supply chain issues, so property values need to be carefully evaluated,” Bostley said. “Property valuations are being revisited for most commercial properties and adjusted upwards significantly to coincide with today’s pandemic material costs.”

While Bostley says her role has always been consultative, not only for risk management but also for general business practices, more so now, different risk strategies are being explored in greater depth to contain costs.

“For example, higher deductibles, risk retention and transfer or altogether avoidance are more often discussed,” Bostley said. “I am also spending more time talking with clients about improvements in all areas of the business, so this can be relayed to the underwriters when pricing programs. Upgrades, improvements, policy changes – all good information that should be shared with your carrier partners to assist brokers with negotiating rates.”

Bostley notes that the challenges the industry is dealing with today are complex, as many external factors are driving the increases in premiums, including natural disasters, nuclear verdicts, litigation funding, and social issues, to name a few.

“We are only able to control a certain piece of the puzzle, so businesses need to be diligent and stay committed to best practices and operate in a way to help mitigate losses and control what we can,” she said.

She also says the insurance industry is facing a major shortage of talent, with 400,000 retirements expected nationally through the end of the year.

“Professional services from your insurance broker are critical in today’s market conditions,” she said. “If you are not having regular dialogue with your risk management broker team, then you may want to think about repositioning. It is also helpful to work with someone who specializes in your industry and has a greater understanding of your risk and has solid carrier contacts.”

Kevin Mucci, an account executive with J.D. Chapman Insurance Agency, says one of the ways the role of insurance agent has changed over the past five years is that it has grown in depth and breadth.

“It has definitely expanded the realm of what we do,” Mucci said. “Before, I was more of a products consultant, where I knew the product and would say, ‘Here you go, you’re all set.’ Today I’m more of a risk advisor.”

Mucci says his role now is to help open the door and show clients the unknown or the possibilities of what could happen, something that is a lot easier considering the past five years and the unexpected challenges brought on by the pandemic.

He encourages business owners not to make assumptions about their coverage and to talk with their agent to find out as much as possible about what’s covered and what’s not.

“Insurance isn’t the bad guy,” Mucci said. “Insurance is going to be there to make you whole, but some things just cannot be insured. My role is about being transparent and helping them understand what is and what’s not covered.”