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Impact of Covid-19 pandemic on Insurance Sector

The Coronavirus pandemic has changed our world in many different ways and has created one of
the most severe global economic crises in human history. The pandemic has had a profound
impact on the insurance industry too. The coronavirus and its spread has thrown a curve ball for
everyone across the globe. Not only has it had a micro-level impact but it has affected countries
at a macro-level as well. Industries across the globe are facing challenges they haven't seen
before. One such industry that is facing multiple challenges is the insurance industry.

Life Insurance
The Coronavirus Disease (COVID-19) outbreak will likely affect life insurers in the following
ways:
(1) increased incurred claim costs, including death and disability claims, and drug costs,
(2) adverse movements in the financial markets, including declines in bond yields, equity
markets, and real estate, reducing profitability; and
(3) business interruption and potential impact on revenues. As coronavirus continues to spread
across the world, its effects are rippling across financial markets and the global economy.
The life insurance industry is no exception, particularly given the increasingly global nature
of many insurers and their sizable investment.

Travel Insurance 
Coronavirus has dealt a monumental blow to the travel industry. Many travel insurance
companies stopped writing new policies.

1. Some travel insurance companies have stopped selling policies. Most of the


cessations happened for international markets. Notably, U.K.-based travel
insurance companies stopped selling travel insurance.
2. New policies come with more limitations. Insurance products are tightening
their coverage to exclude future pandemics like the coronavirus.
3. “Cancel for any reason” insurance is getting new restrictions or
disappearing. These policies, which allow you to cancel a trip for any reason and
receive a partial refund, are less generous after the outbreak.

Motor Insurance
New automobile purchases constitute a major portion of the premiums, and hence the lockdown
and virtual stoppage of business may aggravate the situation
Lack of purchase of new vehicles is one of the biggest challenges. Claim surveying will be
impacted by the lockdown as surveyors will not be able to go out to survey vehicular damage,
either at all or on time. since the lockdown started, very few vehicles have been plying. Hence,
very few accidents are expected, resulting in very low claims on existing policies.
Reference
The Economic Times 2020,Corona virus impact on life, health and motor insurance, viewed 8
July 2020, <https.//m.economictimes.com>
Actuarial post 2020,The effect of corona virus on life insurance, viewed 8 July
2020,<https.//www.actuarialpost.co.uk.>
Elliott C 2020 on, The effect of corona virus travel agency, viewed 8 July
2020,<https.//www.forves.com>
Insfocus2020, The effect of corona pandemic on insurance sectors, Viewed 8 July
2020,<https.//www.insfocus.com>