Global insurers and reinsurers reported approximately US$28-billion of losses related to the coronavirus pandemic in 2020, with approximately US$3.6-billion of losses from life insurance and reinsurance, largely driven by mortality claims.
Around the world, claims were concentrated in event cancellation, commercial property business interruption, travel, accident and health, trade credit and other lines, say analysts with Moody’s Investors Services.
“Coronavirus losses were largely an earnings event in 2020 and they affected reinsurers more than primary insurers,” they write. “With rising vaccinations, the prospect of good economic growth and continued rate increases, (re)insurers expect improved profitability in 2021.”
Although they say the industry still faces the reemergence of claims inflation as courts reopen – in the U.S. courts have ruled in favour of insurers, while in the UK, the country’s Supreme Court ruled in favour of policyholders regarding certain business interruption claims – they add that they believe insurers and reinsurers will be able to absorb incremental coronavirus losses.
European insurers, however have for the most part ceased or curtailed most writing of event cancellation insurance. “In recent property and casualty (P&C) contract renewals, insurers and reinsurers alike have introduced explicit pandemic exclusion clauses,” they write. “Additional lines of business that could be affected by the coronavirus pandemic include employment practices liability, general and professional liability as well as directors’ and officers’ insurance.”
