Reinsurance News

Analysts assess potential Covid-19 impact on reinsurance market

11th March 2020 - Author: Staff Writer

While the eventual impact of Covid-19 (more commonly known as Coronavirus) on the global insurance market remains unclear, analysts at international law firm Bryan Cave Leighton Paisner believe there’s potential for the issue to cause insurers to maximise their reinsurance recovery.

virusAnalysts say such a development has the potential to grip the reinsurance market “in a way we have not seen for some time.”

As the virus continues to spread across Asia, Europe, Africa and the US, health related fears continue to mount.

Supply chains have been interrupted; large events cancelled; offices closed; travel plans cancelled and the effects will continue to be felt as the days and weeks go on.

Analysts note that the obvious classes of business facing potential claims are Travel; Life; Health; Event/Contingency; and Business Interruption.

Artemis ILS NYC 2023 conference

However, there is potential for other less obvious classes of business to be impacted too, such as Errors & Omissions; Directors & Officers; Shipping/Marine; Employer’s Liability; and Public Liability.

The report states reinsureds will inevitably be looking at how Covid-19 related losses may be aggregated in order to maximise recovery under any reinsurance.

There are, of course, issues such as which policy year will respond, and whether the outwards reinsurance is ‘back to back’ with the inwards claims.

As there is no direct authority on the aggregation of reinsurance claims related to a single communicable disease/virus, decisions as to aggregation will need to be undertaken with reference to the specific words of the reinsurance policies in issue; the nature of the underlying claims that the reinsured is seeking to aggregate; and some of the authorities on the meaning of “event” and “cause” as discussed above.

Print Friendly, PDF & Email

Recent Reinsurance News