Pooling Perspective on COVID-19 (April 6, 2020)


By Ann Gergen, Executive Director

COVID-19 hotspots are expected to move in waves across the continent. Similarly, the coronavirus-related issues pools face – and the decisions they’ll have to make – are also likely to impact pools at different times in the coming weeks.

Some pools are already on the leading edge of this crisis, and others are not yet there. This is not only a factor of where infection rates are higher, but also the coverage any given pool provides, their type of member entities, and the state in which they’re located.

Pools are used to solving problems quickly and effectively. But right now, there’s a lot we don’t know and realities are shifting very quickly. Perhaps the best you can do is plan for a week at a time and continue adjusting as information becomes available.

Here are a few things that might be useful to think about as you plan for this week:

1. Aggregation of Claims and Occurrence Language

Pools are still learning the potential impact of COVID-19 on their members, and there’s not yet a clear picture of claim risks. As member needs emerge, so too will further understanding about how each pool’s reinsurance might respond. 

A key consideration is whether COVID-19 will be considered a single event or cause and therefore to what extent related reinsurance claims might be aggregated. 

Just like other industries, the insurance sector is facing significant financial pressures and anticipating legislative influences. Questions of coverage and occurrence language will be worked out, but it’s going to take some time.

2. Impact of COVID-19 Workers’ Compensation Presumptions

This is an issue unique to public entity pools in the United States. A few states have already passed laws to cover COVID-19 as presumed workers’ compensation for emergency and health care workers. Aside from the matter of overall costs, there are at least two other big questions:

  • If COVID-19 is presumed work-related, how does medical care for testing and treatment within workers’ compensation coordinate with a health benefits program (which is likely providing COVID-19 care without copays or coinsurance)? The real value in a workers’ compensation presumption would seem to be the wage replacement benefits paid out during illness or quarantine. See how LARM has addressed this need in Nebraska.
  • Will the presumption apply only to emergency responders? Over time, you might imagine similar requests being made by school staff caring for the children of essential employees, transit employees still providing busing, etc. 

Given how much we have yet to learn about the coronavirus, it will be particularly difficult to project these claims costs and society’s ability to absorb them. Early cost estimates, as well as parameters of a presumption adoption, will likely continue to shift.

3. Fiscal Realities for Local Public Entities

Your pool’s COVID-19 response is likely to include monitoring the fiscal conditions and needs of its member public entities through 2020 and beyond.

Some public entities are beginning to make significant operational decisions, including layoffs and program cuts for the remainder of the year. Other difficult financial decisions, including some that will have major operational impacts within your pools membership, are just a matter of time.

It’s tough to make reliable predictions at this point, given that we don’t yet have a good sense of when shelter-in-place orders, bans on non-essential service and other economic depressors will end. 

For a starting perspective about local public entity fiscal realities, this article from Brookings might be useful. But remember, these are early insights with limited shelf life.

4. Pool Staffing Decisions

A few pools are beginning to evaluate their own needs relating to claims and risk management services as well as other member support in this time of greatly narrowed focus. 

While operational costs are often a small component of a pool’s overall financial picture and some staff reassignments are possible, we don’t yet fully appreciate what the environment or expectations will be in the months to come. 

For some pools, difficult staffing decisions may be necessary to ensure the highest level of financial stability. For others, the conversation may be more about diminishing workload demands and mirroring their public entity members’ needs.


Ann Gergen is AGRiP’s executive director and a former pool administrator. She has worked closely with and for pools, public entities, reinsurers and related service providers throughout her career.

Each week, Ann will offer insight into COVID-19 issues AGRiP members are experiencing and related trends to monitor. For more, access the full series of COVID-19 perspective posts.

Access AGRiP’s COVID-19 Resource Center for coronavirus information, links and news relevant to pools. Email us with questions or comments, or connect with us on LinkedIn, Twitter, YouTube and Facebook.