The COVID-19 Market Survey includes responses from hundreds of identifiable market participants, of which more than half have responsibility for, or provide input to, reinsurance and retrocession buying decisions.
Uncertainty surrounding the virus outbreak and its potential impacts on the insurance and reinsurance industry remains, and only time will tell exactly how the risk transfer sector responds to the current crisis.
This survey aims to understand the potential implications for the re/insurance market from the point of view of those participating in it, and features responses from organisations across the value chain in all corners of the world.
One thing that’s clear from the survey results, is that market participants are concerned that business interruption claims as a result of the pandemic could be forced into property lines.
We asked respondents how concerned they were that legal action was looking to force retroactive cover for pandemic business interruption, and almost 33% said they were very concerned, while almost 18% said they were extremely concerned. In contrast, just 7.6% of respondents said they were not at all concerned by this issue.
Potential for business interruption legal action also came high when ranked against other issues potentially impactful for the industry as it tackles the virus outbreak. In fact, the only issue ranked as more significant for the re/insurance sector was investment declines and financial markets.
Interestingly, the aggregation of COVID-19 claims across all lines came in third, which supports analyst commentary that for now at least, the expectation is for the investment side of the balance sheet to take more of a hit than the underwriting side.
Regarding underwriting, and almost 33% of survey respondents expect cancellation & contingency lines of business to suffer the most from the coronavirus outbreak, with survey results showing that market participants view this line as the most exposed.
Losses are also expected in travel and life / health lines of insurance and reinsurance business, as well as within the aviation space, albeit it to a lesser extent. The large majority of survey respondents expect losses within the property reinsurance and catastrophe space to be low to medium, which is the same view held for retrocession business.
Overall, nearly 85% of respondents to our April 2020 COVID-19 Market Survey expect the pandemic to result in more reinsurance firming. Furthermore, the results to the survey reveal that with less than 10% of respondents expecting to purchase slightly less or much less reinsurance or retrocession in light of the pandemic, it’s clear that the large majority anticipate that the crisis will drive up demand for protection among buyers.
For insurers and reinsurers of all shapes and sizes these are challenging and unprecedented times. Amid all of the uncertainty, this survey is designed to capture a snapshot of this historic moment, create useful data to inform actions, and take the pulse of the market at this time.
We’ve made the full results of this COVID-19 re/insurance market survey freely available to our readers and we’re happy to discuss the results with industry participants and to discuss sponsorship enquiries from those looking to raise their profile in the reinsurance sector. Contact us.