The Government Actuary’s Department has released its survey on the impact of pandemic on public sector insurance.

Questionnaires were distributed during July and August. 80 responses were received from a mixture of Unitary Authorities, County Councils, Metropolitan District Councils, London Boroughs, Fire and Police Authorities, and District Councils. The responses provide an informative snapshot of the experience of local authorities at the height of the pandemic. 

The Current Effect of the Pandemic

The questionnaire asked the authorities to reflect on three areas and how they had changed as a result of the pandemic:

  • Claims incurred by local authorities;
  • Payments of claims by insurers to local authorities; and
  • The service provided by insurers to local authorities.

Across all three questions the main response was that there had been “no change”.  However in terms of claims incurred by local authorities, over 30% of responses recorded that the current situation was “somewhat better” than before.  This reflects the obvious drop in volume of highways, motor, and employer’s liability claims during lockdown. 

The New Normal

Unfortunately however there was an overwhelmingly negative response when it came to views on the lasting effects of the pandemic, reflecting the increased risks factors relating to the “new normal” and living with Covid-19, and the resultant increased cost of insurance for public bodies.  In addition, many responses reflected a concern about authorities’ ability to maintain the provision of services during the lockdown period, not least as a result of the inevitable drop in staffing levels.


While the lockdown has resulted in a short-term reduction in claims volumes, there is a real concern for the future.  As well as a fear of an escalation in claims, there appears to be a real concern that new risks created by the pandemic will result in major insurers squeezing cover, both in terms of price and the scope of wording.  As a result, the report confirms that a number of local authorities are reconsidering their approach to insurance in general. This includes some authorities which are considering moving away from commercial insurance and looking at pooling arrangements.


For further support and advice relating to the impact of COVID-19, please view our COVID-19 Advisory Service page.

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