Professions confront virus impact

The real tragedy of the coronavirus pandemic arises from the human misery and appalling death toll the virus has brought. Other consequences, including the financial and commercial impact, are therefore secondary, but they are nevertheless important. Scarcely an industry has been unaffected and those few that appear to have benefited take no pleasure in doing so.

ABI guides insurers and policyholders

The insurance industry was among the first to feel the impact, as claims on holiday insurance policies started to flood in. On 4 March, the Association of British Insurers reaffirmed member travel insurers’ commitment to offer enhanced help and support to customers, pledging to process as quickly as possible all valid claims for cancellation and travel disruption not otherwise compensated.

As the virus spread, affected individuals with income protection insurance wondered where they stood. Again, ABI published guidance explaining that where a policy had a very short waiting period a valid claim could be possible for infection or medically-advised self-isolation. Illness shorter than the waiting period would not qualify; policies vary, said ABI, so ask your insurer or adviser if in doubt.

An increased death rate has obvious implications for insurers, as additional life insurance claims would result from the sad deaths of coronavirus victims on top of deaths due to other causes. On the other hand, payments under pension annuities would cease, or in many cases reduce to the level of income to which a surviving spouse may be entitled.

Another question arising on insurance, also addressed by ABI, was that of what happens if someone misses payments due to financial hardship over coronavirus. Missing payments can cause cover to lapse, meaning that a subsequent claim could fail. ABI advice was for anyone in difficulty paying their insurance premiums to contact their insurer to see whether any leeway could be permitted.

Advisers calm their clients

As the crisis unfolded, investors around the world became increasingly nervous about the impact on economies and companies alike. Stock markets suffered inevitable falls, with exchange rate volatility also affecting the sterling value of international portfolios. Many investors sought expert guidance from their financial advisers about how to react to the market turmoil.

The housing market has also felt the effects of the virus. Helpfully for many affected borrowers, the government orchestrated a widespread three-month mortgage payment holiday soon after the Bank of England cut its base rate to a lowest-ever 0.1% on 11 March, Budget Day. However, on 27 March ministers asked for home moves to be postponed if possible, thus unavoidably slowing the market.

Fewer property transactions were among the effects upon solicitors, whose professional body The Law Society is providing advice to member firms on coronavirus implications. Demand for will-writing has reportedly surged, with one TV report showing two socially-distancing staff outside a client’s open front window witnessing her signature. Some court hearings are being held remotely.

Alternative audit procedures

Restrictions on travel and meetings are an issue for accountants, so the Institute of Chartered Accountants in England and Wales has issued guidance on such matters as alternative audit procedures and appropriate going-concern assessments while the business outlook is very uncertain. The ICAEW sees it as likely that some corporate financial reporting will be delayed.

Hardly any part of the financial and legal sectors is unaffected by COVID-19. With business levels stifled and face-to-face meetings banned, maintaining client communication is vital. So, working remotely, our expert team has expanded its output. To complement our established publications, blogs, newsletters and social media posts for clients in the financial and legal professions and elsewhere, we’re introducing weekly news summaries for advisers’ use.