Switzerland’s biggest insurer has received hundreds of millions of dollars in claims as a result of the coronacrisis in the first quarter. More will come over the course of the year.
Zurich Insurance estimates the claims from Covid-19 to reach about $750 million in the full year 2020, an outlook that is subject to significant uncertainty as the group said in a statement released on Thursday.
Of this total of $750 million, the insurance company has received some $280 million in the first quarter. In addition, the group also spent some $90 million on measures to support customers and on commitments to communities. The company sees itself well placed to manage the challenge from Covid-19, with the Swiss Solvency Test ratio at a solid 186 percent.
P&C Premiums Rise
Despite the crisis, the company has had a solid quarter, with gross written premiums up 7 percent in property and casualty, driven by growth in the EMEA and North America markets. The life insurance business however new business annual premium equivalents dropped 10 percent, reflecting the impact of Covid-19, particularly in the Asia Pacific region and in Brazil. The decrease was prompted by the impact of government lockdowns that rendered face-to-face distribution channels redundant.
«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 Zurich's Chief Financial Officer George Quinn.
Historic Industry Losses Predicted by Lloyd's
Quinn's words echoed a statement from Lloyd’s, the insurance and reinsurance market place, also released on Thursday. The coronacrisis will lead to «historic losses across the global insurance industry» with a total projected of $203 billion in 2020. The figure is composed of $107 billion in underwriting losses covered by the industry plus a fall of investment portfolios of an estimated $96 billion.
