The Changing Nature of Risk – Casualty Dynamics: History shows that the insurance market is cyclical, and this is especially true for casualty lines of business. As long-tail lines casualty lines, the ultimate profitability of a year is not known for many years as changing loss trends and causes may not be recognized until it is too late to protect against adverse development. The casualty marketplace now finds itself in such a position, according to Christopher Ross, Managing Director, Guy Carpenter.
Chart: Top 10 Largest Insured Losses vs Projections for COVID-19: The chart in the link below shows how industry loss estimates for COVID-19 put forward by a number of entities compare to other major insured events, in inflation-adjusted terms.
COVID-19 Losses and Business Interruption – Leading Up to January 2021 Reinsurance Renewals: With regard to direct COVID-19 losses, many market commentators are revising their initial loss estimates downward, particularly in the domain of property business interruption. Based on third-quarter earnings announcements to date, reported losses for COVID-19 reached just over USD 25 billion, much of which is incurred but not reported.
The Long Haul to Normalcy: The pandemic is likely to be one of the slowest-developing catastrophes that the sector has ever encountered: claims will manifest themselves differently compared to more conventional natural catastrophe events and potential surprises remain a (long-term) concern. Recent analysis from Guy Carpenter-affiliate Oliver Wyman shows that the fourth quarter of 2021 is likely the earliest we can get close to “back to normal” in the United States.
Video – Cyber Underwriters Avoid COVID-19 Exclusions Even as Ransomware Concerns Soar: COVID-19 has presented an opportunity for rogue actors to attack vulnerable companies and indeed individuals. In the following video with The Insurer, O’Brien discusses how cyber underwriters are avoiding COVID-19 exclusions despite increasing ransomware concerns.
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Wildfire – Understanding and Modeling the Risk: The ability to understand the underlying risk and to model potential exposures will be key to risk management and underwriting decisions moving forward.