Blog

The coronavirus pandemic presents an opportunity for all stakeholders involved in promoting access to insurance to be more empathetic with those who usually lack financial resilience and to realise the urgent need to narrow the insurance gap to make them more resilient. This crisis should provide the insurance industry and supervisors with the impetus to enable and promote innovation to unlock access to valuable insurance products for those who need them the most and build trust in a responsible insurance market.

In December 2019, before COVID-19 unfolded into a global crisis, the Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA) and Bank of England published a joint consultation paper on how to strengthen operational resilience in financial institutions. The new requirements were in response to IT failures within the financial sector. Most strikingly the proposals introduce a new paradigm of outward-facing awareness where firms must factor in their impact on their customers and the financial system as a whole. Firms should no longer consider operational resilience to be constrained within their balance sheet. In hindsight, this was a timely publication, and these proposals were a clear precursor to the UK regulators’ response to COVID-19.

Over the past few months, the economic impact of the coronavirus disease (Covid-19) has become one of the greatest challenges facing the financial system since the 2008 financial crisis.  In addition to the immediate and grave health concerns, we are seeing a much wider impact on all of our lives, the broader economy and the financial system. Understandably, this has created a great sense of unease around the world. In situations like these, we recognise the essential role of insurance. The protections provided to individuals, households and businesses are critical in helping people respond and ultimately recover from this crisis.