Lloyd’s of London expects the total losses to the non-life insurance sector caused by Covid-19 will be $203bn – including $107bn in underwriting losses and the remaining $96bn lost through drops the value of investment portfolios. The world’s oldest insurance market said the underwriting losses alone will be on a par with the combined losses of three catastrophic windstorms in 2005 (hurricanes Katrina, Rita and Wilma), one of the most costly years on record for claims. Lloyd’s CEO John Neal said the marketplace alone is expecting to pay $4.3bn in claims.
Two business leaders of the insurance broking sector have proposed the creation of a collective within the insurance industry, which would need government backing, to pre-empt and reinsure “super perils” like pandemics. Insurtech founder James York, who created online insurance marketplace Worry+Peace, along with Society of Insurance Broking non-executive director Liz Foster, came up with the idea. The duo launched its call-to-arms in the form of Totus Re – a website that contains an explanation of its ambition.
Swiss giant Zurich Insurance said it expects the cost of Covid-19 on its property and casualty book to be $750m, after already receiving claims amounting to $280m in Q1. Despite this, the insurer believes the underwriting impact will classify it as an earnings event, not a loss event, meaning it gains more in premium than it pays out in claims. Zurich CFO George Quinn said the firm’s diverse portfolio of risk and capital position will allow it to manage the challenge of Covid-19.