- New research by The Geneva Association finds that life and health risks for pandemics similar to COVID-19 are insurable: they are generally non-systemic and modellable.
- Property & casualty (P&C) insurers, on the other hand, would have to collect business interruption policy premiums for 150 years to make up for projected global output losses in 2020 related to COVID-19.
- Insurers have an important role to play in protecting businesses and supporting economies, but it must be through participation in government-led initiatives. A Geneva Association report on ‘pandemic risk solutions’ is forthcoming later in 2020.
Zurich, Switzerland (Oct. 26, 2020) – Amid widespread public discussion on how to address the deep financial implications of COVID-19, The Geneva Association, in collaboration with the University of St. Gallen, has issued a new evidence-based study on the risk-taking capacities of insurers related to pandemics.
- Access the study: An Investigation into the Insurability of Pandemic Risk
“When COVID-19 hit, insurers moved quickly to provide relief to their customers – for example, through reduced premiums – safeguard their employees, and engage with governments,” said Jad Ariss, The Geneva Association’s Managing Director. “They are promptly paying all legitimate claims where pandemic risk is covered. But, as our research shows, the pandemic exposed a massive protection gap in the area of business continuity risk. We need to find sustainable solutions which harness the industry’s potential contributions while maintaining its solvency and viability.”
“Insurers are providing meaningful support to people in the areas of health and life during COVID-19. But pandemic-induced business losses defy basic, widely-accepted criteria for insurability,” said Kai-Uwe Schanz, The Geneva Association’s Head of Research & Foresight and the leading author of the report. “Unlike risks like natural catastrophes, they occur on a global scale and are not diversifiable. Governments and insurers urgently need to figure out the right partnership modalities to prepare for – and respond to – extreme risks like pandemics. The Geneva Association’s research will support this endeavour.”
Following the publication of An Investigation into the Insurability of Pandemic Risk, The Geneva Association will publish Public- and Private-Sector Solutions to Pandemic Risk later in 2020.
About The Geneva Association
The Geneva Association is the only global association of insurance companies; its members are insurance and reinsurance CEOs. Based on rigorous research conducted in collaboration with its members, academic institutions and multilateral organizations, The Geneva Association:
- Identifies and investigates key trends and risk areas that are likely to shape or impact the insurance industry and develops corresponding recommendations for the industry and for policymakers;
- Provides a platform to its members, policymakers, academics, multilateral and non-governmental organizations to discuss these trends and recommendations;
- Highlights the positive contributions of insurance to a better understanding of risks and to building more resilient and prosperous economies and societies – in both developed and emerging countries – and thus a more sustainable world.
In total, the companies of Geneva Association members are headquartered in 25 countries around the world; manage USD 17.1 trillion in assets; employ 2.4 million people; and protect 1.8 billion people.
For more information, please visit www.genevaassociation.org.
SOURCE: The Geneva AssociationTags: Business Interruption, coronavirus, epidemic, market dynamics, report, The Geneva Association