Global COVID-19 Insurance Losses to Be Higher than Early Estimates: Lloyd’s Chairman
Global insurance losses from the COVID-19 pandemic will be higher this year than the $107 billion Lloyd’s of London had previously estimate.
Its Chairman Bruce Carnegie-Brown said on Wednesday.
Carnegie-Brown told the Reuters Events Future of Insurance USA conference that pandemic-induced losses will be on a par with 2017.
When three Atlantic hurricanes contributed to a catastrophe bill of $144 billion, the highest on record according to Swiss Re.
Which in March shut its underwriting room
The first time since World War II due to a UK government lockdown were facing claims from 16 different business lines.
“Unlike many events, a pandemic is everywhere at the same time.
Adding that the outbreak had extended longer than expected Carnegie-Brown said,.
The 330-year-old Lloyd’s operates a commercial insurance marketplace, insuring anything from oil rigs to footballers’ legs.
It has said it will pay 2.4 billion pounds ($3.2 billion) in pandemic-related claims for the first six months of 2020.
Lloyd’s has proposed a “Black Swan” reinsurance scheme to governments globally to ensure better cover during circumstances.
The pandemic and other disturbances to business
It was hard to get government attention on the topic so far.
“The challenge for governments of course is that they are very short-term focused… (it is) very difficult for them to lift their heads above the parapet and think about the future,” Carnegie-Brown said.
Cyber exposure remained the biggest risk faced by insurers, he added, echoing comments made earlier this week by insurance broker and consulting firm Marsh & McLennan.
($1 = 0.7517 pounds) (Reporting by Noor Zainab Hussain in Bengaluru; editing by Carolyn Cohn in London and Jan Harvey)
The insurance industry is showing resilience in face of the COVID-19-led economic downturn,” Group Chief Economist.
The magnitude of premium losses will be similar to that seen during the global financial crisis in 2008-09.
Even though this year’s economic contraction of around 4% will be much more severe.
Unlike for the global economy, we expect a strong V-shaped recovery in insurance premiums,
A remarkable showing considering that the world is currently in the throes of the deepest recession ever”.
This year’s recession will be the deepest since the Great Depression of the 1930s, but it will also be short-lived.
The recession will lead to a steep fall in demand for insurance.
Due to prevailing and lower interest rates, products will be more affected, while mortality related covers will be more stable.
The non-life sector will fare better, with global premiums forecast to be broadly flat (-0.1%) after growing by 3.5% in 2019.
A main reason for the better showing in non-life is that the COVID-19 crisis has hit at a time of rate hardening in the sector.
Which has supported premium growth.
Premiums in trade and travel-related insurance business such as marine, aviation and credit will be hit the hardest.
Property and medical business will be more stable.