COVID-19 claims so far likely to be manageable; reinsurers de-risking

Willis Re COVID-19 Impact Report - Seite 2

In combination, the pressures across multiple fronts are inauspicious, taking place at a time when the Industry was securing improved pricing across most business lines and geographies after several years of natural catastrophe losses around the world as well as prior-year deterioration in several liability classes. The report offers insurers guidance on:

• Evaluation of post COVID-19 capital adequacy
• Adjustment of risk tolerance and appetite and the importance of planning
• Evaluation of the new underwriting environment and the impact on secondary (reinsurance) market dynamics post COVID-19
• Guidance to navigate reinsurance markets and identify areas where COVID-19 will shape negotiations for 2020 and beyond

James Kent, Global CEO, Willis Re, said: “With uncertainty on both sides of the balance sheet, a capital squeeze is becoming increasingly likely. The most successful strategies will see executive teams assimilate the current trading environment as it relates to them directly, respond with clarity and direction with support from their advisory partners, and articulate to relevant stakeholders an appropriate route forward. Reinsurance capital will play a key role in supporting this future direction as companies seek to support the rehabilitation of the global economy, with the insurance industry continuing to be a fundamental element in supporting the recovery efforts of its customers.”

Printhan Sothinathan, Co-Head of Global Analytics, Willis Re, said: “In all but a worst-case scenario we expect claims to be manageable overall, although obviously some carriers, based on their circumstances, will find the crisis much more difficult to weather than others.”

Andrew Newman, President, Willis Re said: “The impact of COVID-19 on global reinsurer capital is broad enough that it may exacerbate non-life reinsurance market hardening, particularly in commercial lines. We may see supply and demand imbalances in some areas, so insurers should be taking steps to reduce the risk of being on the wrong end of any market hardening.”

Download the full report. Moving on from the initial assessment phase of COVID-19, A Willis Re Impact Report, First Edition will be updated as the COVID-19 crisis evolves.

About Willis Re

One of the world's leading reinsurance brokers, Willis Re is known for its world-class analytics capabilities, which it combines with its reinsurance expertise in a seamless, integrated offering that can help clients increase the value of their businesses. Willis Re serves the risk management and risk transfer needs of a diverse, global client base that includes all of the world's top insurance and reinsurance carriers as well as national catastrophe schemes in many countries around the world. The broker's global team of experts offers services and advice that can help clients make better reinsurance decisions and negotiate optimum terms. For more information, visit willisre.com.