The Covid-19 pandemic is one of the most significant economic loss events in history for the insurance industry. However, it is not just the scale of the impact that is unprecedented. Claims trends and risk exposures are likely to change in the medium to long term due to the pandemic.
With the reduction in economic activity during periods of lockdown, traditional property and liability claims have been brought under control, especially in the aviation and freight sector, but also in many other industries with less accidents at work, on roads and in public spaces, according to a new Covid-19 report – Changing the claims models – from Allianz Global Corporate & Specialty (AGC).
The coronavirus epidemic has reduced the risk in some areas while modifying and worsening it in others. The most significant changes in society and industry brought on and accelerated by the pandemic are likely to have a long-term impact on claims trends in the commercial insurance industry, ”said Thomas Sepp, Chief Claims Officer of AGCS, in an interview on the AGCS website.
“The growing reliance on technology, the shift to remote working, the reduction in air travel, the expansion of green energy and infrastructure and a reshaping of global supply chains will shape future trends in waste for businesses and their insurers. ” Estimates vary, but the insurance industry is currently expected to pay up to $ 110 billion in pandemic-related claims in 2020, according to Lloyd’s. AGCS alone has provisioned around 488 million euros (US $ 571 million) for the planned claims related to Covid-19, in particular for the cancellation of live events and the disruption of film or film productions in the entertainment industry.
“We have seen claims in certain lines of business, such as entertainment insurance, increase during Covid-19, while traditional property and liability claims have been brought under control during periods of lockdown,” says Philipp Cremer, Global Claims Manager at AGCS. “There is still a risk of claims occurring when factories and businesses restart after periods of hibernation, and given longer development models for third party claims in damage lines. Notifications of claims for traffic accidents, slips and falls or injuries at work slowed down as more people stayed at home and with the temporary closure of many stores, airports and businesses during the periods. lockdowns across the world. AGCS has also noticed a positive impact on the resolution of US claims of court stays and trials. Some plaintiffs and complainants have been more open to negotiating out-of-court settlements rather than choosing to wait a long time until their case is scheduled – a trend also highlighted in another recent GATS publication on trends in liability losses. In general, claims activity is expected to pick up after economic activity picks up.