Covid-19 pandemic losses approach $50bn mark
The Covid-19 pandemic is the mother of all systemic shock losses. According to analysis by insurance broker Howden, pandemic-related insured losses stood at $43.5bn by the end of 2021.
It’s the third-largest pay-out by the insurance industry for any recorded natural or man-made catastrophe, behind Hurricane Katrina and the 9/11 terror attacks.
In addition to life and health insurance (L&H) claims, most Covid-19 related claims were from event cancellation insurance and business interruption (BI) claims from companies affected by lockdowns, according to the Global Claims Review 2022 published by Allianz. It also noted a small number of professional indemnity claims made against advisors, including insurance brokers related to BI cover.
Many Covid-19 BI claims are yet to be resolved and are subject to policy interpretation and court decisions in several countries, notably the UK, Australia and South Africa.
A sample of recent reinsurer financial results shows the scale of losses. In its 2021 annual report, Lloyd’s said it had paid £2.9bn to customers impacted by Covid-19 (86% of claims notified to date).
Swiss Re’s 2020 claims and reserves for Covid-19 amounted to nearly $4bn across the group and resulted in a net loss of $878m for the year – its first annual loss since the global financial crisis of 2008. Swiss Re further absorbed total Covid-19-related claims of $2.0bn in 2021, the vast majority of which originated in its L&H business.
In 2020 Munich Re paid €3.4bn Covid-19 related claims, mostly in event cancellation and BI reinsurance lines; €370m was attributable to L&H reinsurance. Higher mortality attributable to Covid-19 in Munich Re’s L&H business produced claims totalling €785m in 2021.