COVID-19 general insurance losses range from $32 billion to $80 billion across key classes in U.S. and U.K., says Willis Towers Watson

Financial impact report presents different pandemic outcomes and economic scenarios on general insurance in the U.S. and U.K., including the London Market

ARLINGTON, Va., May 01, 2020 (GLOBE NEWSWIRE) -- Willis Towers Watson’s (NASDAQ: WLTW) Insurance Consulting and Technology business has published a report that provides an initial estimate of the financial impact of COVID-19 to the property and casualty insurance industry. The focus of the report is on general insurance business written across key classes in the U.S. and U.K., including the London Market.

The report provides an overall estimate of the potential COVID-19 insured losses across a range of pandemic scenarios,¹ with loss estimates provided for those general insurance classes that Willis Towers Watson expects to be adversely affected by COVID-19. These include U.S. and U.K. business interruption, contingency, U.S. directors’ and officers’, employment practices liability, general liability, mortgage, trade credit and surety, workers compensation.

• “Optimistic” scenario (return to pre-COVID-19 state following three months of social distancing): Willis Towers Watson estimates there could be $11 billion in COVID-19 insured losses within these selected lines and geographies.
  
  
• “Moderate”² scenario (gradual return to pre-COVID-19 state following six months of social distancing): Willis Towers Watson estimates $32 billion in COVID-19 insured losses within these selected lines and geographies.³
  
  
• “Severe”⁴ scenario (health impact approaching the scale of the 1918 flu pandemic): Willis Towers Watson estimates $80 billion in COVID-19 insured losses for the same lines and geographies.

“Beyond its devastating human cost, the COVID-19 pandemic has swiftly upended economic activity around the world. It appears the industry-wide level of general insurance loss could exceed that resulting from the 2001 World Trade Center event,” said Alice Underwood, global leader, Insurance Consulting and Technology, Willis Towers Watson. “Given the potential scale and systemic nature of pandemic loss, discussions about the need for some sort of government backstop to address future pandemic risk have already begun.”