Impact of the Coronavirus Pandemic (COVID-19)
Despite the significant health challenges and severe global economic impact resulting from the coronavirus pandemic (COVID-19), the insurance industry continues to maintain a critical role in the economy, commerce, and the daily lives of most people around the world. As the impacts of Coronavirus continue to unfold, here is an overview of the US property insurance outlook as we move forward.
June 1, 2020, marked the first major renewal date since the onset of the pandemic, confirming COVID-19’s exacerbating effects on an already firming market. Insurers, in RT’s experience, are reevaluating their risk profiles and tightening their terms and conditions, particularly around communicable disease exclusions and business interruption loss triggers. As the first systemic, pathogen-based catastrophe to impact the market in nearly 20 years, we can expect to see a long-term development of losses as claims manifest themselves differently. Preliminary Q1 losses due to COVID-19 estimate to be $9 – $10.3 billion, based on a June 3rd report published by Marsh & McLennan.
Nevertheless, the June 1st renewal date proved that the industry remains well-positioned to support the insurance needs of the business community. Offsetting factors as a result of the pandemic, such as a decrease in auto claims while under lockdown, rate increases across the industry, risk sensitivity from previous years of above-average losses, and higher demand for reinsurance, are all acting to counterbalance the effects of COVID-19. Looking back, the property market has been tested in times of crisis through Hurricane Andrew in 1992, the 9/11 terrorist attacks in 2001, Hurricane Katrina in 2005 and Superstorm Sandy in 2012 – and each time adjusting quickly to meet the immediate and future needs of our clients.
RT Specialty and Ryan Specialty Group will continue to closely monitor all of the evolving insurance, regulatory and legal landscapes around COVID-19.