Coronavirus impact ‘manageable’ for insurers, reinsurers: S&PPosted On: Feb. 24, 2020 2:30 PM CST
The overall impact of the coronavirus is expected to be “manageable,” according to a report Monday from Standard & Poor’s Global Ratings Inc.
S&P noted that, given China’s prominence in global supply chains, contingent business interruption claims could be widespread, and that capital markets in China and Asia are more likely to be hurt by the virus than others.
The ratings agency expects any damages to be well within insurer and reinsurer capital tolerances.
“Although there will be claims, S&P Global Ratings expects insurers and global reinsurers based in Europe, the Middle East and Africa and the U.S. to hold firm, without suffering earnings and capital shocks,” S&P said in its report EMEA And U.S.-Based Re/Insurers Likely To Take COVID-19 In Stride.
Lines that could be triggered by claims include aviation, travel insurance, credit insurance, and contingency or event cancellation cover, the report said.
High-profile international events such as the GSM Association’s Mobile World Congress Barcelona 2020 have been canceled due to concerns about the virus.
S&P also noted that the coronavirus is currently classified as an outbreak and that pandemic mortality appears to be the largest exposure.
“For EMEA-based and global reinsurers, their largest hypothetical exposure would arise from pandemic risks via their mortality business in their global life reinsurance portfolios. This particularly affects the large global reinsurers,” S&P said.
More insurance and risk management news on the coronavirus crisis here.