جريدة عالم السياحة والاقتصاد، تهتم بصناعة السياحة باطيافها ، الشؤون الاقتصادية والبيئة والسياحة الدينية والمغامرة والسفر والطيران والضيافة

Coronavirus: Likely Increases in P&C Insurance Claims

235

Insurance Organizations

March 12, 2020-wtten

Insurance clients in the hospitality and tourism sectors are particularly exposed to incurring losses as a result of large customer concentration in one location.

he Coronavirus Disease (COVID-19) continues to spread across the globe causing wide-spread anxiety and disruption to organizations, including voluntary and involuntary quarantines. Property and casualty (P&C) insurance companies could incur insurance underwriting losses directly as a result of the outbreak. However, potential losses are not limited to insurance underwriting losses. Equity market fluctuations and cuts in interest rates by central banks to limit the economic fallout from coronavirus may also affect investment income because of the fluctuations in realized and unrealized market losses.

As the virus continues to spread across the globe, the most immediate impact for P&C insurance companies will be in the valuation of equity investments and fixed-income assets, which are affected by equity and bond market volatility. Underwriting results may not be affected materially for the time being. However, claims will start to manifest in some niche industries like hospitality, tourism, transportation, and entertainment as trips and events get canceled or more people become infected.

We consider the coronavirus to be largely an economic event for now, which will not result in significant underwriting losses for the P&C industry overall. However, some lines such as events cancellation and travel insurance will experience an increase in claims.