2020 first-quarter data in comparison to both the previous quarter and the first quarters of prior years, gave little hint of the shock that was to follow in 2020's second quarter. Indeed, for the property/casualty insurance industry, the first quarter of 2020 generally went well. Although there were some bumps in the road--policyholders' surplus fell by $75 billion, or -9.0 percent, from the 2019 year-end level--most measures of financial results (premiums, underwriting results, investments, surplus level in relation to net written premiums, and profitability) were positive. The industry results were released by ISO, a Verisk Analytics company, and the American Property Casualty Insurance Association (APCIA). A discussion of the key drivers of the quarter's performance is included. Full report
According to this report, the COVID-19 pandemic "will spark the deepest recession since the 1930s," and it is forecast that that global gross domestic product (GDP) will contract by about 4 percent in 2020, leading to a "slump" in insurance demand for the year. However, the industry is expected to withstand what is predicted to be a short-lived recession, with insurance demand increasing in the recovery period. The range of current claims cost estimates is very wide due to ongoing uncertainty about the volume of COVID-19 claims, but the midpoint estimate of the range of global property/casualty claims related to the pandemic is $55 billion, based on several sources. Swiss Re noted that the insurance industry was well-capitalized before the outbreak and is expected to weather the shock. The bounce back is expected to be led by commercial property/casualty, and notably in emerging markets. 2020 declines in life and nonlife premium growth are forecast to be similar to those rates seen during of the global financial crisis in 2008.
This lengthy compendium of sixteen articles examines the ways that insurers are reimagining their use of technology, developing new approaches to the delivery of technology and making certain that their core technology will meet their needs in the future. In recent months, the world has changed as the coronavirus pandemic spread around the globe and insurance industry leaders are debating what the next normal will be and envision some of the changes becoming permanent, particularly in core technology and digital capabilities. The new normal will depend on the quality and flexibility of IT, and the report begins with a graph of the fundamental shifts needed to reach the efficient frontier in technology and operations. The report includes multiple exhibits. Full report.