Top Risks For The Global Insurance Industry

Implications of COVID-19 for Insurers: Responding to challenging times.

#INSURANCECANCELED #CANCELCULTURE

A crisis such as Covid-19 affects all business sectors – but there are some unique considerations that impact the insurance industry. So, how is the insurance industry likely to shape up to the unfolding crisis? What are the implications across the different segments of general and life insurance? And what longer-term trends might the outbreak serve to usher in for the future? . . . To help you understand your exposure to COVID-19, and more importantly, position your business to be resilient in the face of this and prepare for the future, please review timely insights from KPMG Insurance leaders from across the globe. . . . https://home.kpmg/xx/en/home/insights/2020/04/implications-of-covid-19-for-insurers.html#:~:text=COVID%2D19%20could%20create%20liquidity,a%20result%2C%20a%20cash%20management.&text=Insurers%20drive%20towards%20a%20wider,in%20wake%20of%20COVID%2D19. . . . 2020: Q and A with the experts: COVID-19 and the insurance industry . . Tony Wirjanto, a curator for Insurance and Asset Management for the World Economic Forum and professor at the School of Accounting and Finance, takes us through how COVID-19 has affected the insurance industry, and what can be done about it. https://uwaterloo.ca/news/news/q-and-experts-covid-19-and-insurance-industry 2020: The impact of COVID-19 on the L&H insurance industry in Canada. . . https://www2.deloitte.com/ca/en/pages/finance/articles/the-impact-of-covid-19-on-the-canadian-life-and-health-insurance-industry.html . . https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/about-deloitte/ca-en-covid-19-impact-of-covid-19-on-the-l&h-insurance-industry-in-canada-aoda.pdf . . . 2020: Major Canadian insurance companies won’t cover coronavirus treatment for travellers to ‘high-risk’ countries... . . . Some major Canadian insurers will no longer cover emergency medical expenses related to the novel coronavirus for travellers who visit countries with high-level travel advisories. . . . Canada’s largest insurance company, Manulife Financial Corp., told The Globe and Mail on Friday it will not cover any medical expenses related to COVID-19 under individual travel policies if customers go to a destination that was the subject of a “high level” government advisory before their departure. . . . Allianz Global Assistance Canada – which earlier this week updated its trip cancellation policies due to COVID-19 – also said it will not cover emergency medical treatment for customers who contract coronavirus in a country that had a level 3 or 4 travel advisory related to coronavirus before they left on their trip. . . . That limitation also applies to people leaving on cruises on or after March 9, as the company considers a warning from the Public Health Agency of Canada for Canadians to avoid cruise ships travel to be a Level 4 government advisory, Allianz spokesperson Dan Keon said. . . . “Insurance is really there to protect for the unexpected in emergencies,” said Joan Weir, director of health and disability policy at the Canadian Life and Health Insurance Association. . . . “At some point in time, [COVID-19] became so widespread that some insurers took the position that it is no longer an emergency situation from a travel perspective any more. People are certainly more aware of the coronavirus, of what COVID-19 is, and they are more aware of travel advisories too." . . . For Manulife and Allianz customers travelling to destinations that are not the subject of advisories, medical costs related to the coronavirus will be covered. As well, medical costs that are not related to the coronavirus will be covered for all travel destinations. . . . (Manulife’s group benefits medical coverage, which is offered to individuals through their employers, is not affected by the company’s changes to its individual travel policies.) . . . Travel insurance helps people who have to cancel trips, or receive medical care outside Canada, due to unforeseen events. Policy coverage can range from $2-million to $10-million per person. But as the coronavirus pandemic continues, insurance companies are deeming the virus a “known event” that customers are aware of before leaving the country. The Canadian government has issued travel warnings for China, Iran, northern Italy, South Korea and Japan, in addition to the cruise ship advisory. . . . Other major insurers in Canada, such as Canada Life Assurance Co. and Sun Life Financial Inc., have not yet changed their out-of-country coverage. . . . Sun Life’s group benefits extended health care program, which includes “out-of-Canada” coverage for travel medical emergencies, does not have an exclusion for travel advisories or bans. This means Sun Life plan members who go to countries with a travel advisory or on a cruise ship are still covered as long as they remain eligible under their group plan. Canada Life, which also provides medical coverage to group-benefit customers, has made no changes with respect to COVID-19. “We will not decline coverage to people solely on the basis of their travel to a country with a travel advisory or a cruise ship,” Canada Life spokesperson Liz Kulyk. . . That could change as new information emerges, she said. . . “We encourage all Canadians to follow the direction of the [government] with respect to travel advisories.” To date, credit card providers have made no changes to out-of-country emergency medical benefits they offer. . . . https://www.theglobeandmail.com/business/article-major-canadian-insurance-companies-wont-cover-coronavirus-treatment/ . . . The Negative Impact of COVID-19 on Life Insurers . . . Understanding COVID-19 induced mortality risk is significant for life insurers to better analyze their financial sustainability after the outbreak of COVID-19. To capture the mortality effect caused by COVID-19 among all ages, this study proposes a temporary adverse mortality jump model to describe the dynamics of mortality in a post-COVID-19 pandemic world based on the weekly death numbers from 2015 to 2021 in the United States. As a comparative study, the Lee-Carter model is used as the base case to represent the dynamics of mortality without COVID-19. Then we compare the force of mortality, the survival probability and the liability of a life insurer by considering COVID-19 and those without COVID-19. We show that a life insurer's financial sustainability will deteriorate because of the higher mortality rates than expected in the wake of COVID-19. Our results remain unchanged when we also consider the effect of interest rate risk by adopting the Vasicek and CIR models. . . . https://www.frontiersin.org/articles/10.3389/fpubh.2021.756977/full . . . COVID-19 (coronavirus) information from CLHIA and Canada's life and health insurers . . . https://www.clhia.ca/web/clhia_lp4w_lnd_webstation.nsf/page/0BBA1DB2145B6A96852585300062B207!OpenDocument . . . Top Risks For The Global Insurance Industry

. . . The impact of COVID-19 on global insurance markets is largely felt through asset risks, notably capital markets volatility, and weaker premium growth prospects. S&P Global Ratings expect most COVID-19-related losses (business interruption, event cancellation, etc.) to be picked up by reinsurers, so primary insurers' technical performance is unlikely to deteriorate materially. Strict lockdown measures helped maintain satisfactory performance, as motor and medical claims had a positive impact on loss ratios. Developed markets, particularly life ones, are likely to shrink in real terms as a result of the economic slowdown. Developing markets, through their riskier asset allocation, will likely experience more declines in return on equity than developed markets. Ultralow interest rates mean that the most significant source of risk to insurers is the performance of investments, especially life insurers with guaranteed back books. . . . https://www.spglobal.com/en/research-insights/featured/how-covid-19-has-changed-insurance Global insurance leaders discuss the challenges stemming from the pandemic and new opportunities that will shape the future of industry. . . . At the Insurance Governance Leadership Network (IGLN) virtual meetings held June 2 and June 9, participants turned their attention to the longer-term implications of the pandemic, including the operational and financial challenges that lie ahead. Three key themes emerged from the discussions: . . In brief . . The COVID-19 pandemic created substantial operational and financial challenges for insurers. Now they are accelerating digitization trends that were already in progress, managing financial uncertainty and seeking to improve their somewhat tarnished reputations. Global insurance leaders discuss these issues and the long-term implications that will shape the future of the industry. https://www.ey.com/en_gl/insurance/how-insurers-will-address-the-long-term-impact-of-covid-19 . #INSURANCECANCELED