Commercial insurers will be hard hit by pandemic-related losses, delaying their profits recovery to the second half of 2021 and accelerating price increases for buyers, Fitch Ratings Inc. said in a report Friday.

Insurers writing event cancellation and credit and surety policies will experience “high” pandemic-related losses and report “significant losses in both 2020 and the first half of 2021,” the rating agency said.

Other niche businesses, such as media or travel insurance, will also see “large” losses, Fitch said in the report.

Fitch noted that some insurers have increased prices “drastically” in loss-affected lines of business and some have decided to withdraw completely for certain lines and geographies.

“Commercial insurers will try to amend terms & conditions and raise prices for new policies, reinforcing the hardening of the market,” Fitch said.

While demand may shrink in absolute terms due to recessionary impacts, prices will move higher reflecting “the perceived increase in riskiness and lower available capacity,” the report said.

The industry is also facing mounting political pressure to pay for business interruption claims irrespective of whether the relevant policies cover pandemics or not, Fitch noted.

“Unclear policy wording and political pressure now raise increasing doubts how successfully commercial insurers can fend off claims now,” Fitch said in the report.

On top of that, the whole industry will have to deal with investment losses, calls for rebates in those lines of business experiencing a significant fall in claims, and an increasing number of defaulting customers, it said.

Reinsurance coverage, too, may prove to be ineffective as pandemics are usually excluded from business interruption reinsurance policies, according to the report.

“No immediate clarity” about the size of total losses for the industry is expected as litigation between insurers and policyholders may take several months to resolve, Fitch said.

More insurance and risk management news on the coronavirus crisis here.