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Insurers believe most business interruption policies will not be triggered by the coronavirus, according to a report Wednesday from investment bank Piper Sandler & Co.
Other claims related to the pandemic in lines such as general liability insurance and directors and officers insurance should be “manageable,” Piper Sandler said.
Citing recent conversations with insurance company management, Piper Sandler said, “They believe the situation does not create a necessary property loss and that the standard insurance policy specifically excludes losses related to pandemics.”
The emerging claims in other areas, including general liability and D&O, related to the pandemic and the financial market volatility are largely viewed as being manageable — “more an earnings issue than a book value issue,” Piper Sandler said.
Net investment income will likely fall as a result of lower interest rates, but “most insurers are holding firm with their investment portfolios,” neither significantly accumulating cash or looking to take advantage of the markets, the report said.
Insurance company results could benefit from light first-quarter catastrophe losses in the U.S., Piper Sandler said.
People staying home during the coronavirus outbreak could also have an impact. “All of the insurers we spoke to expect reduced miles driven to reduce the number of auto claims, but nobody felt confident to predict the magnitude of any change,” Piper Sandler said.
More insurance and risk management news on the coronavirus crisis here.