The estimates involve the overall property and casualty (P&C) payments specific to the coronavirus.
Zurich insurance has released its most recent forecast regarding payments of pandemic claims. The insurer giant predicts that its own payouts will be in the ballpark of $750 million for 2020.
The insurer’s CFO said that the claim level can be compared to all 2017’s hurricanes combined.
George Quinn, CFO at Zurich said that the size of the pandemic claims is similar to what they experienced in 2017 from Hurricanes Harvey, Irma and Maria, combined. That said, it’s important to note that the present figure remains an estimate and is not yet a certainty. There are many factors that have yet to be seen which will further define the final total the insurer will face.
“So this is not especially unusual territory for us in terms of the size of the event,” explained Quinn in a media teleconference regarding updates to the company’s first quarter. He went on to underscore that the company remains “well equipped to absorb” losses of this size due to its solid balance sheet. The payouts may be high, but they remain within the group’s risk tolerance range.
Throughout the first quarter of 2020, the pandemic claims paid by Zurich came to about $280 million.
“The impact of claims related to the COVID-19 outbreak and the sharp falls in financial markets in the latter part of the first quarter are expected to remain a 2020 earnings event,” said Quinn in a statement issued along with the update. “Group solvency remains strong and together with the diversity of our business and our conservative balance sheet, I am confident that the group is well placed to manage the current challenges.”
The primary factors behind the predicted $750 million in COVID-19 related claims have to do with property business interruption (as well as the loss-of-profits element of those policies). That said, other large driving forces include accident and health, travel and assistance and other various forms of miscellaneous coverage lines such as workers’ compensation, said Quinn.
Of all the pandemic claims, business interruption comprises about 60 percent of what Zurich has been paying. Travel makes up another 25 percent and the remainder of the types of coverage sit at about 15 percent.