A number of leading global businesses, including Twitter, Google, and Fujitsu, are allowing their employees to work remotely, either permanently or for the foreseeable future. But SMEs also expect staff to work remotely following the COVID-19 pandemic, a trend that will affect the insurance industry on multiple fronts.

According to GlobalData’s 2020 UK SME Insurance Survey, one quarter of SMEs reported that remote working had increased since the beginning of the pandemic, while 16% reported significantly increased levels. Among these two groups, a quarter expect remote working to revert to pre-coronavirus levels once the pandemic is over. However, over two thirds of SMEs expect that remote-working levels will be higher than before the coronavirus period, which will have lasting consequences on the insurance industry.

As employees remain at home, businesses will be using their office space less. According to research by Accumulate Capital, 73% of business leaders anticipate that UK businesses will downsize their offices in 2021, reducing the size of the commercial real estate market and subsequently the commercial property insurance market. Claims in the employers’ liability market have the potential to increase if employees do not have a proper workstation at home, leading to increased musculoskeletal strains and injuries.

Remote working also has indirect effects on businesses that provide goods and services to employees, such as restaurants and pubs. Pret a Manger has announced plans to close 30 locations and cut a third of its staff. Costa Coffee has also announced that up to 1,650 jobs are at risk. As businesses close locations due to decreased demand from employees, this will again shift the insurance landscape. Fewer physical locations will lead to reduced levels of property and public liability cover. However, as businesses start to shift their model – by increasing home delivery services, for example – there will be increased opportunities in other lines of business such as motor insurance.