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The global insurance industry is set for historical losses due to the impact of the COVID-19 pandemic on the sector, a recent economic study undertook by Lloyd’s of London to understand the impact of the pandemic on the non-life insurance industry, revealed.
The estimated underwriting losses covered by the global insurance industry in 2020 as a result of COVID-19 are approximately $107 billion. This is on par with some of the biggest major claims years for the industry, such as when three catastrophic windstorms have struck (2005: hurricanes Katrina, Rita and Wilma; 2017: hurricanes Harvey, Irma and Maria).
“The global insurance industry is paying out on a very wide range of policies to support businesses and people affected by COVID-19,” John Neal, CEO of Lloyd’s said.
The Lloyd’s insurance and reinsurance marketplace said it will pay its customers in the range of $3 billion and $4.3 billion in claims as a result of the Covid-19 impact.
According to Lloyd’s, the claims that it expects to pay are on par with 9/11 in 2001 and the combined impact of hurricanes Harvey, Irma and Maria in 2017. It expects these losses to rise even further if lockdown measures continue into another quarter.
Lloyd’s expects the cost to the global insurance non-life industry to exceed the cost of those historical events, once the scale and complexity of the social and economic impact of COVID-19 is fully understood.
“What makes COVID-19 unique is the not just the devastating continuing human and social impact, but also the economic shock,” Neal said.
The global non-life insurance sector will also witness falls in investment portfolios estimated at $96 billion, bringing the total projected losses of the sector to $203 billion, Lloyd’s said.
(Writing by Gerard Aoun; editing by Seban Scaria)
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