Monday, November 9, 2020 - 09:45

Given that business-as-usual is unlikely to return soon due to the coronavirus pandemic, U.S. property/casualty insurers will continue to face challenges related to virus-related insurance losses and premium volume declines in 2021, according to Fitch Ratings.

The operational and risk management challenges of managing workforce flexibility, limiting risk aggregations and reducing claims exposure through clarity of policy terms will endure beyond the pandemic and become “new normal” longer-term drivers of the industry, contend analysts James Auden and Christopher Grimes, authors of “The Next Phase: U.S. Property/ Casualty Insurers.”

The analysts estimate that incurred losses from coronavirus claims have reached approximately $8 billion for North American publicly-traded insurers to date and approximately $23 billion, including large global (re)insurers.

However, Fitch warns that settlement litigation in some segments could take years and ultimate insured losses will depend on uncertain factors, including: the duration of the pandemic, extent of economic shutdowns from potential future waves of large-case outbreaks, the timing of a return to more normal business and social activity, and the speed and strength of the economic recovery.

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