RBC Capital Markets analysts have said COVID-19 related P&C claims in the first quarter generally came in below expectations, with some companies even suggesting that guidance provided only a few months ago could be overly cautious.
COVID-19 P&C claims are reported to be running well below the FY20 levels, with the majority of companies not actually experiencing any additional claims in the quarter.
In addition, Q121 claims on the whole came in below analysts’ expectations.
On balance, it’s thought the 2020 COVID-19 claims estimates were likely overly cautious with significant levels of reserve redundancy potentially emerging.
Analysts think it is unlikely that this will unwind in 2021 but see the potential from 2022 onwards.
First quarter was the most costly quarter for the life reinsurance units of the reinsurers with the results impacted by the highest level of COVID-19 related deaths in the US.
The global picture for COVID-19 related cases and mortality is actually reported to have worsened in Q221 from the lower levels seen in earlier on.
However, for the life reinsurers, whilst there is some exposure to other markets, the US is seen as the dominant risk.
Based on analysis, RBC Capital Markets believes that average daily COVID-19 deaths are running around 65% below the Q1 daily average.
