contingent business interruption

Cincinnati Financial Corporation’s CEO Steven Johnston said the company’s property catastrophe reinsurance panel will be expected to “follow our fortunes” on any Covid-19 pandemic related losses that fall under that program’s coverage for the re/insurer.

Analysts from investment bank UBS have added 50% to their estimate for the eventual insurance and reinsurance industry loss from the Covid-19 coronavirus pandemic, lifting the top-end of the range to $60 billion.

A number of insurance-linked securities (ILS) fund managers have proactively marked-down some collateralised reinsurance positions, seeing a risk of potential exposure and perhaps even some losses caused by the Covid-19 pandemic.

The Pennsylvania Supreme Court has ruled that the Covid-19 pandemic constitutes a “natural disaster” potentially setting an unwelcome precedent for some in reinsurance and insurance-linked securities (ILS).

Reinsurance companies need to focus on capital preservation in order to offset the impacts in terms of losses and investment declines from the Covid-19 pandemic, according to S&P Global Ratings.

A steering group has been formed by UK insurance and reinsurance industry leaders with Stephen Catlin of Convex as Chair, to work with UK government backed mutual terrorism reinsurance firm Pool Re to strengthen the industry’s response to future pandemics.

The majority of analysts and observers do not believe that the reinsurance and insurance-linked securities (ILS) industry faces a tidal wave of business interruption claims as a result of the coronavirus pandemic.

Two very senior insurance and reinsurance market leaders have warned that the sector is already facing “massive” losses from the Covid-19 coronavirus pandemic and that any forcing of business interruption claims on top of that could “bankrupt” the industry.

Every so often some new insurance or reinsurance product, or strategy, emerges that shows us a glimpse of the future of this marketplace, often driven by technology, data and the use of parametric triggers.

While the immediate economic and financial market impacts of the Covid-19 coronavirus pandemic have ramifications for investor appetite, there are longer-term reasons that ILS funds could face challenges when it comes to accepting new inflows while the virus remains prevalent.