As many of us look toward a fresh start in 2021, some insurance industry experts say we can’t forget where we’ve been in 2020. The global pandemic — originally assumed to be a short-term event — is likely to continue for months into the future.
How does that affect the coming year?
Peter Mahler, vice president – religious markets underwriting at Church Mutual Insurance Company, S.I.1 shares his thoughts.
Q: What does a permanent shift to virtual service delivery or online giving mean for your policyholders?
Peter Mahler: It doesn’t change much from an underwriting perspective. Core operations for churches will remain the same. We may see fewer risks related to slips, trips and falls, but by moving online, organizations open themselves up to other risks.
When considering online donations, organizations need to make sure their data is secure. Organizational leaders, staff and volunteers all play a part in promoting, implementing and enforcing safe digital practices to protect their organizations. Are they staying current on cyber theft trends? Cybersecurity measures need to be put into practice through existing tools and providers. We encourage customers to consider, “Is the system you’re using to collect information secure? Are you properly protecting your donors’ personal information?”
When you move into publishing content on social media or live streaming your services, there are inherent liability risks with the increased use. Usually, the benefits outweigh the risks. You could increase your reach to worshippers exponentially, which can help with fundraising, recruitment and general public awareness. But, as with any other venture, you need to ensure you are properly covered for the worst-case scenario.
Q: Will COVID-19 alter how carriers offer insurance?
Mahler: Early in the pandemic, we were hearing a lot about business interruption claims and whether those would be covered due to the pandemic. As we move forward into 2021, you will see most carriers add a communicable disease exclusion at the next renewal for their customers. Within a year, the entire industry will have this clarifying exclusion on their policies. This won’t be a big change in the religious market as many policies already have language that excludes communicable disease. We saw this come about during other global health events like H1N1, the bird flu and SARS. It just wasn’t on as large a scale as COVID-19.
Q: As many areas continue to limit in-person gatherings, how do you recommend houses of worship keep their ministries strong?
Mahler: I think the most important thing here is organizations should always follow local or national health protocols. The key for viability and survivability is to follow those protocols to protect congregants’ health and safety first. After that, churches should consider adapting technology to support their mission and minister to the community especially during these difficult times. Technology allows you to continue to reach your members. Continue to explore and use different options to minister to people. What works for one portion of your membership may not work for another. Offering them different options to connect with the church given our current climate will keep them engaged.
Q: As you mentioned, technology has taken a huge lead in today’s society due to the pandemic. Separate from that, are there other ways technology can help churches?
Mahler: Absolutely. Church Mutual is a great innovator when it comes to offering technology-based protection to our customers. Sensor technology that runs off cellular service has been a huge help to many organizations as they are spending even less time in their facilities. We have a water and temperature sensor that sends the customer text alerts if the temperature drops dramatically or it senses water in the building. This has saved not only claim dollars for our customers, but has prevented disruption to our insureds’ missions.
Now that we have these sensors in thousands of our customers’ facilities, we’re looking at other ways to leverage similar technology for our customers’ benefit. We’re exploring infrared camera technology to detect electrical issues within buildings. We are also rolling out an easy-to-activate law enforcement notification for armed intruders. You’re going to start seeing a lot more Internet of Things technology being used and adapted in different ways to protect policyholders from loss.
Another way we’re using technology is to fight wildfire losses. As we have seen this year, wildfires are becoming a larger industry concern every year. At Church Mutual, we’re using wildfire mapping technology to look at historic fire zones and also track current fires and predict their paths. When fire is imminent, we deploy private fire response services to exclusively help protect our customer facilities within the paths indicated by data mapping. As I mentioned with our sensors program, it far more economical to prevent a loss than to pay out a claim. Better still, it benefits our customers by preventing disruption and hardship.
“We went into the pandemic thinking this would be a brief blip on the radar. As the months have dragged on, instead of considering this a “new normal,” at Church Mutual we’re calling it our “reshaped reality.” In this reshaped reality, just as Church Mutual has had to pivot, churches need to pivot, if they haven’t done so already. This means providing their services in nontraditional ways.
For houses of worship, this means continuing to host outdoor services while the weather allows. Others are embracing technology to deliver their messages. I envision many churches maintaining these alternate forms of worship well into 2021 and continuing to leverage technology even when the pandemic is over.
We’re hearing from several of our policyholders that they’ve made the switch to accept online giving. For those that have, market research has shown that churches are seeing an increase in donations from their online givers. Technology is here to stay. It’s a fundamental, permanent shift.”
— Peter Mahler
Q: You mentioned wildfire concerns and how weather may affect facilities. Do you see extreme weather as a continued threat in 2021?
Mahler: This has been one of the worst years on record for hurricanes, with five having already hit the Louisiana Gulf Coast. This will remain a huge concern for insurers in 2021, right up there with wildfires. We’ve also seen extreme hail events this past year, which have caused millions of dollars in damage across the country. The numbers show more and more extreme events every year. This isn’t going away.
Whether you’re in a wildfire area or a hurricane area, you need to look at how your facilities are constructed. This doesn’t always mean you need a new facility, but sometimes there are upgrades you can make to lower risks relative to your specific geography. If you’re in a fire zone, consider installing a fire-resistant roof to protect from flying embers. In coastal regions, do you have hurricane shutters? I think risk control measures will become more important to help customers avoid or reduce losses from these types of natural disasters.
Again, it makes good sense to use these risk control tools versus playing out claims. But more importantly, the organizations we serve are vital to their communities. We want to do anything we can to protect their people and property so they can continue to fulfill their missions.