COVID-19 - General insurer implications - COVID-19 blog | Deloitte Australia has been saved
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The global outbreak of COVID-19 has quickly escalated in both size and scope, with the ongoing spread of the coronavirus impacting millions of lives and the accompanying lockdowns significantly impacting the world’s economies. These events have implications for general insurers on multiple fronts given the wide variety of coverage they offer and the operational implications from underwriting and claims processes.
The impacts on general insurers differ by class of business and need to be considered across pricing, underwriting, claims management and reserving.
For pricing and underwriting:
Insurer considerations around new pricing may result either in premium reductions for some classes given lower levels of human activity, or in higher premiums, given the economic conditions are triggering higher claim levels.
For claims management and reserving:
The lockdowns and physical distancing rules are creating distinct patterns of slower claims reporting, slowing down the claims assessment processes, and creating difficulty in getting expert reports, such as engineering reports for construction and commercial property or expert medical reports for WC and CTP. They are also resulting in lower court and lawyer activity, a decline in recoveries or subrogation and a potential rise in gratuitous payments.
In our next blog we will set out some claims and reserving considerations by class of business.
Kaise is a Partner in Consulting and advises general insurers and reinsurers on a range of matters covering Board and Management insurance reserving advice, corporate strategy, reinsurance programs, claims and capital management, pricing advice on large/complex deals and Appointed Actuary and External Peer Reviewing roles. Kaise’s international experience covers the Australian, New Zealand, South East Asian and European insurance markets.
Rick is a partner of Consulting and part of the Actuaries practice. He has extensive overseas and Australian experience, and is recognised internationally for his work on capital modelling, regulatory systems and pricing and valuation. Rick’s primary focus is developing management information systems and integrating capital models into companies’ decision making. He has also advised regulators on actuarial valuation standards and capital model approval.