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Few were prepared for the abrupt disruption of life-as-usual caused by the COVID-19 pandemic. Profound changes in work, school, and social routines took place over a matter of weeks. Employees carved out workspaces in their homes and learned to use Zoom and Google Meet, students transitioned to virtual classrooms, and everyone adapted to new health and safety routines. Retailers ramped up online shopping and implemented curbside pick-up while restaurant owners struggled to get by on carryout and delivery business.

Changes in work, learning, shopping, and dining routines transformed the risk profiles of many organizations. For some exposures, loss frequency fell due to fewer employees in workplaces, fewer vehicles on the road, and fewer customers in public spaces. In other cases, however, coronavirus-induced changes resulted in a heightened risk of loss. Telecommuting, for example, created new data security challenges. Food delivery produced unexpected liability exposures for restaurant owners. Telehealth made it more likely that doctors will miss diagnoses.

As this Advisen/AXA XL white paper — Everything you know is wrong: New risk management paradigms in the post-pandemic world — written (mid-December), the pandemic has entered a frightening new phase as daily case totals, hospitalizations, and deaths surge to new records. Some states and municipalities are implementing new rounds of lockdowns. No one seems sure how bad it will get or how soon it will end. Eventually, however, the virus will recede, and lockdowns will be lifted. It is unlikely, though, that life will return to the pre-pandemic state of affairs. According to McKinsey & Company, "It is increasingly clear our era will be defined by a fundamental schism: the period before COVID-19 and the new normal that will emerge in the post-viral era: the 'next normal.'"

In the next normal, many of the pandemic-induced changes to the ways people work, shop, dine, and obtain medical services will persist. Many people will continue to shop online, putting pressure on brick-and-mortar retailers. Fear of future pandemics will transform supply chains and factor into new building design and construction. At colleges and universities, some combination of in-person and online courses will be the norm. These changes will permanently alter the risk profiles of businesses, schools, nonprofit entities, and healthcare providers.

Pre-pandemic insurance and risk management strategies may not be relevant in the future. Risk managers and their brokers must understand how risk profiles have changed and ensure that risk management programs keep pace with evolving exposures. They also need to reassess their insurance programs to be certain that coverage aligns with their risk profiles and ensure that coverage gaps are identified and managed.

To learn more about what we found, download "Everything you know is wrong: New risk management paradigms in the post-pandemic world" – a white paper written in collaboration with Advisen and AXA XL.

Global Asset Protection Services, LLC, and its affiliates (“AXA XL Risk Consulting”) provides risk assessment reports and other loss prevention services, as requested. This document shall not be construed as indicating the existence or availability under any policy of coverage for any particular type of loss or damage. AXA XL Risk. We specifically disclaim any warranty or representation that compliance with any advice or recommendation in any publication will make a facility or operation safe or healthful, or put it in compliance with any standard, code, law, rule or regulation. Save where expressly agreed in writing, AXA XL Risk Consulting and its related and affiliated companies disclaim all liability for loss or damage suffered by any party arising out of or in connection with this publication, including indirect or consequential loss or damage, howsoever arising. Any party who chooses to rely in any way on the contents of this document does so at their own risk.

US- and Canada-Issued Insurance Policies

In the US, the AXA XL insurance companies are: AXA Insurance Company, Catlin Insurance Company, Inc., Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Specialty Insurance Company and T.H.E. Insurance Company. In Canada, coverages are underwritten by XL Specialty Insurance Company - Canadian Branch and AXA Insurance Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
US domiciled insurance policies can be written by the following AXA XL surplus lines insurers: XL Catlin Insurance Company UK Limited, Syndicates managed by Catlin Underwriting Agencies Limited and Indian Harbor Insurance Company. Enquires from US residents should be directed to a local insurance agent or broker permitted to write business in the relevant state.