The C-word: six ways it will hit insurers – but some positives

As society and the global economy enters unprecedented times as a result of Coronavirus (COVID-19), the insurance industry is grappling to quantify what its impact will be on the industry. While unpleasant surprises no doubt lie ahead, experts at merchant bank Stonybrook Capital argue that its impact will be muted compared to many other industries.

“Relative to many other industries such as airline, hospitality, sports, and others, the impact appears to be more muted and indirect. We are in unprecedented territory and surprises are likely to emerge unexpectedly. That said, our perspectives on the industry are - on balance - relatively neutral.” Ravi Arps, partner, and Joseph Scheerer, chief executive officer, Stonybrook Capital

• It is unlikely the virus will directly impact the severity of claims experience
• Expenses related to transitioning workforces may pose a challenge
• The crisis is unlikely to impact the industry from a top line perspective
• Lower interest rates are good for insurers looking to borrow or refinance debt

There are six ways in which COVID-19 will impact the re/insurance industry globally. While the virus will undoubtedly throw up further surprises, the industry is relatively well positioned argue Ravi Arps, partner, and Joseph Scheerer, chief executive officer, Stonybrook Capital, in a memo examining the implications of the virus.