Theme of Uncertainty

COVID-19 made 2020 a year like no other: it changed the way we live and work, and its impact will last for years to come. While the future is always unpredictable, the pandemic has ushered in a time of extraordinary uncertainty.


Many businesses and employees are suffering amid the sharp economic downturn. The Ministry of Finance estimates that Bermuda’s gross domestic product contracted 8.5% in 2020. Uncertainty over the course of the pandemic and the speed of economic recovery means all businesses must consider a wider range of potential scenarios than is normal when planning for the future. Health insurers are no exception.

As we approach our health policy renewals, we must account for the impact of several factors, including the consequences of missed routine health check-ups and delayed treatments, and pandemic-related added cost in the healthcare system.

Christopher Mundy, Vice President, Client Management and Tom Healy, Chief Financial Officer, Americas share their views below.

Claims likely to escalate after 2020’s decline

When the COVID-19 measures were at their strictest, in April and May last year, there was a sharp decline in the volume of health claims. However, this quickly rebounded back to normalised levels over the summer, particularly on island. Travel restrictions had a more prolonged impact on overseas claims, especially for elective treatments, which we anticipate will revert to expected norms, as Bermuda’s positive vaccination response allows insureds to travel again. Nevertheless, the path of the pandemic in the United States and how this may affect US hospitals’ capacity for accepting overseas patients is a potential limiting factor.

We are concerned by the potential for what were treatable conditions escalating into acute, expensive claims because of delays in access to preventative diagnostic screenings. Also, we expect less urgent procedures that did not occur last year to add to the typical annual volume of claims. Delaying more critical treatments poses a possible longer term health challenge and health risk with higher related cost.

The return to normalised claim volumes is not expected to be a linear journey, due to multiple waves of the pandemic and higher anticipated claims severity.  

We urge all members to make full use of the preventative benefits available to our members, including regular health screenings, Thrive. wellness resources, our second opinion and telehealth services. Utilising these resources can help reduce claim severity and aid in the early detection of more complex conditions.


Impact of pandemic-related costs on the healthcare system

The true impact of the pandemic on the cost of healthcare is unknown at this point. However, the cost of testing and vaccination, currently borne by the Government, will need to be shared, most likely through an increase in the Mutual Reinsurance Fund (MRF) portion of members’ premium. Also, the increased onus on providers to provide safe and clean environments for patients, through continuous sanitation and wearing of personal protective equipment, will most likely lead to higher claims costs from these facilities.


How Argus has helped clients to navigate the pandemic

We view our relationship with our clients as a long-term partnership. When many clients were financially stretched – through no fault of their own – after COVID-19 restrictions disrupted their businesses, we listened attentively. We agreed to implement a number of strategies, including premium deferrals, for several months and repayment structures to help businesses survive and keep people employed. Through consultation and partnership with employers, we created a low-cost plan, built to have zero profit margin, to support our clients through this difficult period. Members enrolled in the low-cost plan were able to receive care minus the co-pay at our two medical practices, Island Health Services and the Family Practice Group.

Our clients have previously expressed their desire for controlled and predictable annual rate adjustments, to help manage their businesses. To facilitate this, Argus will structure a glidepath back to normal levels and avoid volatile rate movements where possible. In addition, premium rebates will be provided over the course of new policy year 2021/22, to address the lower level of claims experienced by our clients. We aim to give our clients a smooth path to premium adjustments over the long term.


How Argus will continue to act in the interests of our clients

We will maintain our flexible approach to finding practical solutions to help our clients navigate the pandemic. Our combined success relies on taking a longer view. We want to protect your health and deliver excellent service, while containing unnecessary cost and ensuring that our industry remains strong enough to meet your needs.

Our acquisition of two medical practices in 2020 illustrates the value of a model based on improving health outcomes, taking unnecessary costs out of the system and aligning our practices with the patients’ outcomes. Over time, this approach compensates healthcare providers for the quality of care they deliver, which can be measured by monitoring people's long-term health. This patient-centric approach will reap financial rewards that will benefit clients and the broader healthcare system. Wellness is an important part of this model and a prime focus for Argus. Our Thrive. programme offers health and wellness resources, free of charge, to members to support the overall wellbeing of your employees. 


For more information, click here to visit our COVID-19 page.

DISCLAIMER: The content in this article is for informational purposes only and is not intended to be a substitute for professional medical advice, diagnosis or treatment.