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Insurance
The insurance market in the current climate
Is the Coronavirus emergency impacting insurers’ solvency? This is the big question that insurance business leaders are looking for clarity on. Dominic Sharp, Head of Actuarial Services and Darren Vinales, Senior Actuary, Robus Group, reports
Distinguishing between the short-term evidence of what has happened so far and what could happen in the medium to
long term is important to consider.
Looking at actual impact on insurers, it’s still early days. Underwriting volumes are down as people stop instalments, decide not to renew or not to take up a new cover. Any lines that are sold as add-ons will be materially impacted, e.g. extended warranty and motor ancillaries such as gap insurance. Gibraltar is already seeing this, where a lot of this kind of business is underwritten. It is also seeing reductions in claims frequencies on both Motor and Household policies.
These impacts (particularly Motor)
have been noted. Steve Quinn, Managing Director of Premier Insurance commented, “The Motor market is challenged in much the same way as all industries across the globe in not knowing how long this uncertain and distressing period is going to persist for all concerned, and what the net effect is going to be for the various stakeholders in the market”.
Some other insurers have experienced significant drop-off in premium volumes and claim frequency and added that they are focused on claims inflation as repair networks and supply chains are squeezed.
More widely, in terms of direct impact, we expect that travel insurance and business interruption will be heavily impacted but there is little exposure to
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Gibraltar International
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