COVID-19: How the pandemic is changing claims patterns & risk exposures
Allianz Global Corporate and Specialty says the COVID-19 pandemic is one of the largest loss events in history for companies and insurers alike as the wider changes brought by and accelerated by the pandemic is likely to have a long-term impact on claims patterns. Philipp Cremer, the Global Head of Claims at Allianz Global Corporate and Specialty joins CNBC Africa for a conversation on how the
Thu, 08 Oct 2020 11:48:58 GMT
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AI Generated Summary
- The significant impact of the pandemic on insurance, disrupting planned revenues, productions, and private lives
- The accelerated digitalization and shift towards the cyber space leading to increased cyber risks and business interruptions
- The potential for litigation against companies and directors, the rise in premium rates, and the need for collaboration to address economic losses
The COVID-19 pandemic has brought about one of the largest loss events in history for companies and insurers alike, with far-reaching changes likely to have a long-term impact on claims patterns. Philipp Cremer, the Global Head of Claims at Allianz Global Corporate and Specialty, highlighted the significant impact of the pandemic on the insurance industry in a recent interview. Cremer emphasized the importance of insurance during times of uncertainty, noting how the pandemic has disrupted planned revenues, productions, and even private lives, leading to financial losses in industries like entertainment. He underscored the role of insurance in mitigating such risks and providing financial protection when unforeseen events occur.
Cremer also discussed the evolving trends in the insurance industry triggered by the pandemic. He pointed out the accelerated digitalization of work and communication processes, emphasizing that this shift towards the cyber space would lead to an increased risk of cyber incidents and business interruptions. Additionally, Cremer highlighted the need for companies to enhance the resilience of their supply chains in response to the vulnerabilities exposed by the pandemic's disruption.
One significant concern raised by Cremer is the potential for litigation against companies and their directors and officers as a result of the pandemic. While acknowledging the possibility of such claims, Cremer highlighted the unique nature of the COVID-19 event and its impact on the market. He noted that investors often seek compensation for losses through litigation following significant events, and the insurance industry needs to be prepared for potential legal challenges.
Discussing the financial implications of COVID-19 for the insurance industry, Cremer noted that insurers are expected to pay approximately $110 billion in related claims. This substantial payout is expected to contribute to a 'hardening' trend in the industry, leading to increased premium rates across the board. Cremer likened this trend to similar market reactions following events like 9/11, suggesting that the pandemic has acted as an accelerator for existing market dynamics.
Moreover, Cremer emphasized the need for collaboration between the insurance industry and governments to address the economic losses stemming from the pandemic. While insurers cannot single-handedly cover all the losses incurred during the global shutdown, pooling solutions and partnerships with governments can help provide financial support and stability in the face of such unprecedented events.
In conclusion, the interview with Philipp Cremer sheds light on the profound impact of the COVID-19 pandemic on the insurance industry, emphasizing the need for adaptation, resilience, and collaboration in navigating the evolving landscape of claims patterns and risk exposures.