Clear communication and legal decisions are the answer to COVID-19 disputes: Prime CEO

COVID-19 has caused immense upheaval for insurers and insureds, with many people left feeling their insurers have abandoned them in their time of need. Rick Lindsey, CEO of Prime Insurance Company, believes this sense of dissatisfaction and betrayal has escalated the situation to a point where class actions are on the cards.

“When COVID-19 occurred, people panicked—there were a lot of knee-jerk reactions,” Rick Lindsey, chief executive officer of Prime Insurance Company says.

“I believe everybody else did exactly the wrong thing. What you should do is mentally walk around to the other side of the table and ask whether what you are planning would make sense to you, if you were the other party.

“If a company asks us if they can cancel their policy while they are shut down, that makes sense to me. But if you say that you are returning $5 billion to your policyholders and then your policy holder gets a cheque for $20, they are not going to be satisfied.

“It’s falling way short of what a person would say is reasonable—most people would want a free month of cover, not 20 bucks back.”

What should be happening, in Lindsey’s view, is that rather than simply denying claims, insurers should be seeking clear and conclusive legal decisions.

“Bad faith is what everyone in our business is afraid of—that’s how plaintiff lawyers get us. I wouldn’t be denying any claims; that is what the lawyers want you to do. You should go to court and get the court to decide whether the policy covers COVID-19 or not,” he says.

“Get close to your insureds, tell them what is going on. You took their money; never just walk away and leave them. Ask the court to decide—then you can’t be in bad faith because you did the right thing.”

Home working

Discussing the other ways COVID-19 has impacted the re/insurance industry, Lindsey highlights the accelerated shift towards flexible and home working as a positive development for Prime and for the wider industry. Within his company, he has placed an emphasis on getting the work done rather than working particular hours.

“I know a lot of staff are spending time with their children from eight to nine, for example—but does it really matter when they work?”

He does, however, note that certain processes, such as onboarding people, are more difficult with teams working from home.
“It is hard onboarding people—you don’t have the same environment and training ability,” he says. “We are figuring that out; for the future, some are fine going into the office, some want both home and office, and some are very cautious.

“You personally may believe COVID-19 is no worse than the ’flu, or that everybody should be wearing mask—what matters is you have to come down on the safe side.”

As for ensuring business success in a rapidly changing environment, Lindsey recommends always keeping an eye on the road ahead.

“Remember that underwriting is partially looking backwards, but it’s also looking forward: make sure you consider what is coming and make sure you’ve got enough money when it does,” he says.