2020 first-quarter data in comparison to both the previous quarter and the first quarters of prior years, gave little hint of the shock that was to follow in 2020's second quarter. Indeed, for the property/casualty insurance industry, the first quarter of 2020 generally went well. Although there were some bumps in the road--policyholders' surplus fell by $75 billion, or -9.0 percent, from the 2019 year-end level--most measures of financial results (premiums, underwriting results, investments, surplus level in relation to net written premiums, and profitability) were positive. The industry results were released by ISO, a Verisk Analytics company, and the American Property Casualty Insurance Association (APCIA). A discussion of the key drivers of the quarter's performance is included. Full report
According to this report, the COVID-19 pandemic "will spark the deepest recession since the 1930s," and it is forecast that that global gross domestic product (GDP) will contract by about 4 percent in 2020, leading to a "slump" in insurance demand for the year. However, the industry is expected to withstand what is predicted to be a short-lived recession, with insurance demand increasing in the recovery period. The range of current claims cost estimates is very wide due to ongoing uncertainty about the volume of COVID-19 claims, but the midpoint estimate of the range of global property/casualty claims related to the pandemic is $55 billion, based on several sources. Swiss Re noted that the insurance industry was well-capitalized before the outbreak and is expected to weather the shock. The bounce back is expected to be led by commercial property/casualty, and notably in emerging markets. 2020 declines in life and nonlife premium growth are forecast to be similar to those rates seen during of the global financial crisis in 2008.
This lengthy compendium of sixteen articles examines the ways that insurers are reimagining their use of technology, developing new approaches to the delivery of technology and making certain that their core technology will meet their needs in the future. In recent months, the world has changed as the coronavirus pandemic spread around the globe and insurance industry leaders are debating what the next normal will be and envision some of the changes becoming permanent, particularly in core technology and digital capabilities. The new normal will depend on the quality and flexibility of IT, and the report begins with a graph of the fundamental shifts needed to reach the efficient frontier in technology and operations. The report includes multiple exhibits. Full report.
Growth in the cyber insurance market stabilized in 2019 as the cyberthreat landscape expanded and the awareness of risk increased as the world entered the era of the coronavirus pandemic. Hackers continued their attacks on businesses and insurers, and their intrusions evolved while risk managers remained primarily reactive. Software bugs presented these cybercriminals with new opportunities as insurers continued to manage claims related to NotPetya. The first exhibit is a bar graph that shows direct premiums written for both packaged and standalone policies in the U.S. property/casualty industry from 2015 through 2019. The report includes multiple exhibits, including a table that displays captive insurance carriers' aggregate cyber performance by listing direct premiums written, direct paid loss, direct paid loss ratio, and the number of policies in force from 2015 to 2019. The report is available from Conning.
Verisk has released updated 2020 FireLine Risk Reports that provide statistical snapshots of the wildfire risks for Arizona, California and Colorado. Each report includes the FireLine wildfire hazards map that is color-coded to show areas in the state that are at high, moderate and low wildfire risk. The reports also list the percentage and number of housing units at each of these three levels of wildfire risk as well as the top five counties for wildfire risk by number of housing units. The Arizona report lists 2,844,500 housing units at some wildfire risk, with 242,200, or 9 percent, at high and extreme risk. The state's largest wildfire loss was the $120 million recorded in 2002. The California report lists 13,680,100 housing units at some wildfire risk, with 2,054,900, or 15 percent, at high and extreme risk. The state's largest wildfire loss was the $14 billion recorded in 2002. The Colorado report lists 2,212,900 housing units at some wildfire risk, with 373,900, or 17 percent, at high and extreme risk. The state's largest wildfire loss was the $450 million recorded in 2012. Risk reports are available for 10 other western states and two Canadian provinces are also available. Full reports.
Preliminary estimates from the National Safety Council show that the motor vehicle fatality rate per mile driven increased by a stunning 23.5 percent in May 2020 compared to the previous year. Due to the pandemic the number of miles driven in May dropped by 25.5 percent compared to the prior year and the number of deaths from motor vehicle accidents dropped by 8 percent in May. After three straight years of rising fatality numbers between 2015 and 2017, the country had been experiencing a leveling off and small decline in overall fatalities. The current increase in fatality rates threatens to reverse these safety gains. The National Safety Council release also points out that as employers are sending employees back to work they should keep in mind that motor vehicle crashes are the leading cause of workplace deaths and make transportation safety integral to their operations. News Release