Coronavirus trickle down effect on insureds and the economy

We are already seeing a number of businesses being impacted by the outbreak of the Coronavirus (2019-nCoV) and the travel bans being put in place.

It is a very busy time for the tertiary education industry and now we are finding that a large portion of students are unable to enter the country before the new school year. Had the students been here then the impact would not be so bad. However, many of them will now not come or return and that will impact on not only the education institutions, but also the accommodation suppliers and ancillary services.

Food exports from fruit to wine have been delayed either because the ports in China are not able to cope under the current situation or due to bans of imports. This is devastating for many businesses which have already been affected by the drought, bush fires and, more recently, storms.

Yet another industry is tourism –both inbound and outbound– with mainland China. The danger here is that the travel warnings or fear of the virus will have tourists and business people from all countries thinking twice about travelling. The outbreak on the cruise ship Diamond Princess will not be helping either.

By coincidence, I visited the street in Glen Waverley renowned for its restaurants, where a customer was diagnosed with the virus and the street was the quietest I have ever seen it.

All of this has a trickle down effect on so many other industries / businesses and their employees.

There are winners, of course, with sales of masks and hand wash off the scale, to name just two. I see some horrific gouging happening as well.

Clearly the public is still struggling to learn based on the number of people googling “Corona Beer Virus”.

I am fielding more and more questions on insurance coverage every day, in so many classes of general insurance, the latest being marine cargo. But my biggest worry is that in the current hard market, with insurance premiums increasing, and the economy clearly affecting even more businesses in Australia, they will be looking to their insurance spend to cut costs, which in turn will leave them less protected. This can have tragic consequences for the owners and their staff, should a normally insured event happen.

On a more positive note, I am pleased to say the last of our staff landed back safely from China yesterday. That was a great relief for our team, who are more a family than colleagues.

Speaking with a travel insurer yesterday, I learned that they had contacted every single customer on their books that was known to be travelling in China, to offer assistance to get them home. It is things like this that make you proud to be part of the insurance industry.

It is going to be a tough year for a lot of people and businesses. I am optimistic that the scientists will do their thing and develop a vaccine quickly, and I hope that the insurance industry will do their part by offering some relief to businesses that are doing it tough, particularly when they have been loyal clients with a good claims history for many years.