Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

2020 may see record $160bn+ losses, depending on Covid, hurricanes: GC


Insurance and reinsurance market losses from catastrophes and the Covid-19 pandemic already look set to reach somewhere from $100 billion to as much as $160 billion, according to broker Guy Carpenter.

The total industry loss in 2020 could even be higher, if the Atlantic hurricane season proves particularly expensive for the insurance and reinsurance market this year.

The size of the Covid-19 market loss is the other driver of total industry catastrophe losses for 2020, with estimates still having a wide-range for the eventual impact across both non-life and life segments.

Analysts from investment bank Berenberg recently said they believe global claims for the insurance and reinsurance industry due to the Covid-19 pandemic will be manageable, sitting in a range from $50 billion to $70 billion.

However, Lloyd’s of London said that the non-life losses to the 2020 underwriting year alone could be as much as $107 billion, reflecting the significant range in estimates.

So there’s a broad range of estimates, from as low as $30 billion to $100 billion plus, with the impacts on the life and health insurance side also to add, plus the cost burden of the capital market volatility and any investment side losses to consider.

Reinsurance broker Guy Carpenter said that the Covid-19 pandemic ” looks set to rank among the sector’s most expensive events” adding that “the pandemic has the potential to bring unknown loss impacts.”

In addition, Guy Carpenter has warned that the pandemic is likely to be, “one of the slowest developing catastrophes that carriers have ever encountered, likely creating a prolonged period of uncertainty.”

Which suggests it will be some time before the estimates can be deemed more accurate and closer to reality.

Added to the catastrophe losses already experienced year-to-date, plus a normal level of catastrophe losses for the second-half of the year, industry-wide losses for 2020 look set to surpass $100 billion, the broker said, for only the fourth time ever.

But, “Should claims from COVID-19 settle at the higher end of current market estimates, or losses aggregate elsewhere from the ongoing unrest in the United States or an active wind season, 2020 could go down as the most expensive loss year ever and test further the limits of some carriers’ capital resilience,” Guy Carpenter warned.

Guy Carpenter’s current forecast can be seen below, with 2020 perhaps set to be the most costly year ever for the insurance and reinsurance market.


Offsetting the potential record level of losses is the fact some lines of business are actually seeing reduced claims frequency, largely due to the pandemic lockdown and change in economic activity.

In addition, reinsurance market fundamentals remain strong with ample capacity still to meet cedent needs, Guy Carpenter said, with opportunities for carriers to grow into this market environment, particularly the best capitalised and those with new solutions to offer.

Register today for ILS Asia 2023, our next insurance-linked securities (ILS) market conference. Held in Singapore, July 13th, 2023.

Artemis ILS Asia 2023 - Insurance-linked securities conference in Singapore

Get a ticket soon to ensure you can attend. Secure your place at the event here!

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.