The Impact Of The Coronavirus Pandemic On The Insurance Industry
The Coronavirus pandemic has changed our world in many different ways and has created one of the most severe global economic crises in human history. The pandemic has had a profound impact on the insurance industry too. We performed comprehensive research on the impact of the Coronavirus pandemic on the insurance industries and found a several very useful articles published by major consulting companies on this topic. Then, we selected the best three articles to share with you today, where each article provides a different perspective on the issue. Please find below summaries of articles published by insurance experts at PwC, Deloitte and KPMG about the impact of the Coronavirus on our industry.
In late March the global consulting company PwC surveyed about 150 finance leaders worldwide across different sectors to understand their sentiment and priorities related to the COVID-19 outbreak. The survey was called COVID-19 CFO Pulse Survey. The survey identified “potential global recession” as the top concern, with over 80% of respondents identifying this as one of their top three concerns related to Covid-19.
Based on the findings from the survey, PwC extracted insights specifically for the insurance industry. PwC believes that it is almost certain that insurance claims will rise due to the Coronavirus crisis, especially for insurers that offer specialty lines of insurance such as travel, short-term disability, business interruptions and similar. Also COVID-19 could also have troubling impact on other areas such as long-term care insurance lines and alter anticipated loss ratios or disabled life reserves.
Insurers will have to make tough decisions about what is covered and what is not covered in those heavily impacted areas, and in almost every product category. Such decisions can have a big impact on the public’s trust in insurance companies. Therefore another unique challenge that insurers will face during the Coronavirus crisis is the need to address financial risk while at the same time managing reputational risk.
Insurance experts from the global consulting company Deloitte presented their view of the impact of the COVID-19 pandemic on the insurance industry in a recent article. They focused of the impact of the crisis on the insurer’s workforce and agent/broker networks.
Deloitte highlighted the importance of protecting the health and safety of employees and distribution partners in the agent/broker community during the Coronavirus crisis. Furthermore, Deloitte suggests that insurers should consider establishing cross-functional teams for emergency decision-making. Those teams would coordinate the company’s response to COVID-19 related challenges, set new health and safety protocols, and assure quick action as the crisis continues to evolve.
Insurance experts from the global consulting company KPMG also published an article on this topic titled “Do insurers have COVID-19 covered?”. In this article they provided separate insights about the impact of the Coronavirus crises on general insurers, health insurers and life insurers.
KPMG believes that the impact of the crisis on general insurers will be limited, while the impact on health insurers will vary country by country. In addition, KPMG believes that life insurers will face the most difficult challenges of all insurance sectors. This will be the case because of the extreme volatility in the financial markets where life insurers hold a large amount of assets and liabilities.
Please see the links below to access the full versions of the articles reviewed in this blog post. If you need better business intelligence to cope with the impact of the Coronavirus on your insurance business please visit this page to learn more about our Insurance Business Intelligence Suite.