At the start of 2020, no-one could have predicted the impact that the coronavirus pandemic would have on the world. Fast forward a few months and COVID-19 (the disease caused by the coronavirus) has changed how billions of people work, manage their finances, travel, shop and socialise. No other event in living memory has caused so much upheaval for individuals, businesses and society as a whole.
The most direct impact has been on people who have contracted COVID-19. While most make a full recovery (and may not even experience symptoms), millions of people have been hospitalised and hundreds of thousands have lost their lives. People who have tested positive but not needed hospital treatment have still had to self-isolate while they recovered.
During the first half of 2020, the populations of almost every country in the world have had to adapt to lockdown conditions. While these varied widely, they typically included restrictions on movement, association, and on which businesses could operate.
Stock markets tumbled (although they have begun to recover). Many national economies have been plunged into recession and workers have had to accept pay cuts or retrenchment. The service and travel sectors have been particularly hard hit, with businesses from beauty salons to airlines filing for bankruptcy.
Lockdowns have also had serious social consequences, with people experiencing feelings of anxiety, frustration and isolation. Anxiety has tended to focus on both the possible health consequences of COVID-19 – “what will happen to me if I catch it?” and the economic consequences – “what will happen to my job or my business if we cannot operate, or I cannot earn?”. This has led to a change in people’s priorities.
South Africa has always been able to rebound from challenges in the past, but in 2020, our resilience has really been tested. The economic impact on communities and families cannot be ignored, but we’ve already seen people find ways to adapt. Often, this is a question of changing priorities and spending only on essential products that can help protect health and livelihoods.
This global health emergency has led to a much greater awareness of the risks posed by pandemics – and the need to focus on risk avoidance rather than risk management. Previous pandemics (such as SARS in 2002 and MERS in 2012 – both of which were also caused by forms of coronavirus) were relatively minor events. Not this time.
As with all risks, the pandemic can be quantified accurately as more data is gathered. Innovative insurance companies are actively developing pandemic-specific policies to provide the additional cover people will need should they fall ill. This cover offers the promise of relief from the costs of hospitalisation and the loss of earnings while sick. With a vaccine still many months off, pandemic cover looks like a sound investment.