A HEFTY PRICE TAG COVID-19 COULD COST INSURERS $100 BILLION
I n one way or another, the COVID-19 pandemic has thrown every industry into chaos. Service industries, such as bars and restaurants, have been hit especially hard. As time goes on, we are getting a clearer picture of how the pandemic has impacted other markets. The insurance industry in particular is reporting major losses. Lloyd’s of London, an international insurance and reinsurance market, has reported that it is expecting to pay as much as $4.3 billion in claims resulting from COVID-19. This is more than it paid in claims from the impact of hurricanes Harvey, Irma, and Maria combined. Keep in mind that this is just one market. Projections from across the insurance industry estimate that companies could end up paying out $40 billion to $100 billion before everything is said and done. Exact estimates vary greatly because the overall costs associated with COVID-19 are still uncertain. Health experts warn of a potential “second wave” of infections that could come about in the coming fall and winter. There is also the impending threat of hurricane season. Due to the pandemic, there is less time to adequately prepare for the storms. Factor in the predictions of an above-average hurricane season and the resulting damage could be far more severe than usual.
When examining the long-term impact of the pandemic, insurance carriers could also find themselves required to pay out additional claims they had not initially accounted for due to lawsuits and legislative measures across the country aiming to broaden protections for businesses and workers. Some of these measures focus on examining worker’s compensation for front-line health care workers and other “essential” employees. Other measures aim to provide coverage to every business that has purchased business income insurance, regardless of whether or not communicable disease exclusions were included in their policy. There is also the matter of whether or not insurance carriers will have to cover COVID-19 testing or immunization. Whether or not insurance companies will pay for these costs remains to be seen. Many businesses are wondering how the costs of COVID-19 will ultimately impact insurance policies. The State of the Market report published by AmWins Group, which addresses overall market trends of the insurance industry, states that across segments, expect to see a continuation of less capacity, higher rates, and more insurers having trouble filling out placements. As our nation struggles to reopen, it is clear that we must be prepared for the long-term impact of COVID-19, which as it stands right now, looks like higher insurance pricing in the future.
Have a Laugh!
Easy way out on Pg. 4
Specialized Insurance Programs for Specialized Industries. • www.INSURICA.com • 3
Made with FlippingBook Publishing Software