By Anoop Khanna
Investment bank Berenberg analysts have said that as per their analysis global claims for the insurance and reinsurance industry due to the COVID-19 pandemic are expected to be in a range of $50bn to $70bn and will be manageable.
According to a report on www.artemis.bm , Berenberg analysts said the total bill from the pandemic is expected to be, “Significantly less than the $107bn reported by the Lloyd’s of London market estimate on 14 May 2020.”
Lloyd’s estimate said that the non-life insurance industry will face as much as $107bn of losses from the current coronavirus pandemic in the 2020 underwriting year alone.
Several analyst reports had also come up with a broad range consensus for a pandemic industry loss from $30bn to as much as $100bn.
Now, a month or so further down the line, it seems estimates may be falling for the ultimate claims burden the insurance and reinsurance market faces from the pandemic.
Berenberg analysts do not see the pandemic as a significant issue for the insurance and reinsurance sector. The losses are likely to be manageable as (re)insurers have weathered the pandemic well in terms of their Solvency II and related requirements.
“While COVID-19 claims will be large, we believe they are manageable, and there are some offsets, namely lower motor claims during the period of lockdown, rate rises in reinsurance and in commercial lines and from reduced competition from digital start-ups, which are running out of cash.”
Overall, the analysts said that industry losses from COVID-19 are, “similar to those of a medium to large natural catastrophe and appear to be affordable.”
Asia Insurance Review