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Challenges and Wakefulness under Coronavirus

By Editor on Friday, 22 May, 2020

The Coronavirus pandemic and the economic distresses it has triggered, like many other sectors, pose significant challenges for the global insurance industry in 2020.

Challenges and Wakefulness under Coronavirus

The Coronavirus pandemic and the economic distresses it has triggered, like many other sectors, pose significant challenges for the global insurance industry in 2020. At the time of posting this article, the world has 4.9 million confirmed coronavirus cases and the UK has 250,000 infected patients. The insurance industry is also under some pressure in various relevant classes of business, but the insurance industry prominently operates within a risk management frame of mind and (as proven time and time again) can turn "crisis" into "wakefulness" by virtue of its nature to asses risks and provide guidance as well as solutions in the form of protection products. Our industry is one that manages to show great resilience and somehow manages to maintain momentum, as it understands it’s role clearly, no matter how dark the clouds are.

 

Coronavirus will of course have an effect on the performance of insurers globally, undoubtfully increases of claims across various risks underwritten. In addition, decreases in revenue as many sectors and trades simply not operating, prompted most insurers to lower their 2020 performance forecasts. This fact in return also affects the asset management side of the industry as the investments of many insurance companies are also hit by the global capital market turmoil, with investment returns suffering, market value shrinking and financial indicators such as solvency and liquidity under pressure. However, as experienced many times before, there are positive shifts even in the times of most difficulties. Demand for life and health insurance products has been accelerated by the pandemic, boosting productivity in those classes. In addition, notably, business disruption, loss of income, increased cost of working caused by the outbreak has triggered and prompted awareness of the importance of relevant insurance products already available which enables such risks to be transferred and managed effectively.

 

This “wakefulness” continues to spread across in retail insurance products too. According to US media WWMT, an online insurance distribution website ‘Policybazaar’ reports that health insurance sales on its platform have recently increased by 35 to 40 percent and life insurance sales by 20 percent. Perhaps it could be said that the pandemic has prompted us all to re-evaluate what really matters and, in many cases, how unproportionate our spending habits are when the scales are loaded with essentials vs unnecessary buys.

 

We do hope and stay confident that we will defeat coronavirus together and re-bounce stronger than ever, as it’s in our nature to do so. 

 

 

 



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