The cost on a global scale for 2020 will be greater than what the insurance marketplace estimated.
Bruce Carnegie-Brown, chairperson at Lloyd’s of London, announced that the global pandemic insurance losses this year will be higher than what they had previously estimated.
Sixteen different business insurance lines are facing claims at the 334-year-old Lloyd’s of London.
Chairperson Carnegie-Brown recently spoke at the Reuters Events Future of Insurance USA conference. There, he stated that the pandemic insurance losses would be comparable with the price tag associated with the catastrophes that struck in 2017, when there were three massive Atlantic hurricanes that brought a $144 billion bill with them. According to Swiss Re data, that was the highest catastrophe bill on record.
In March, Lloyd’s of London shut down its underwriting room for the first time since World War II. Its most recent estimate on the losses the COVID-19 pandemic crisis would generate was at $107 billion. Unfortunately, it now appears that this figure will be substantially higher, said a recent Reuters report.
Lloyd’s pointed to the higher pandemic insurance losses as signs of the uniqueness of this catastrophe.
“Unlike many events, a pandemic is everywhere at the same time. And it also comes into light through up to 16 different lines of claims,” explained Carnegie-Brown, who also pointed out that the pandemic has been dragging on for longer than had been anticipated.
Lloyd’s expects to have to pay about $3.2 billion (£2.4 billion) in claims relating to COVID-19 covering the first half of this year.
The massive insurance marketplace has proposed a “Black Swan” reinsurance scheme to governments worldwide. The goal is to make certain that better coverage is available during global catastrophes to businesses such as this one. That said, according to the chairperson, so far it has been quite challenging to attract government attention to this subject.
“The challenge for governments of course is that they are very short-term focused… (it is) very difficult for them to lift their heads above the parapet and think about the future,” stated Carnegie-Brown, spotlighting the main challenge in moving ahead from these pandemic insurance losses.