IN FOCUS6-8 min read

The courage premium - How insurers can weather the storm

The Covid-19 crisis has presented the biggest challenge to insurers in generations. Insurers' response during these times will have a lasting impact on them and their policyholders for years to come. In this article we've explored the ways in which this crisis will impact insurers and what they can do to emerge stronger in the long term.

22/05/2020
stormy_waters
Read full reportSchroders - Covid-19 - How insurers can weather the storm - UK - vF - 19 May
0 pages314 KB

Authors

Miguel Tizzone
Solutions Manager, Portfolio Solutions

Insurers are having their toughest year in a generation. Interest rates have collapsed to all-time lows, credit spreads have swiftly peaked to multi-year highs and equity markets have fallen to levels not seen in decades.

The impact on insurers’ liabilities has been meaningful too. Mortality in many countries has worsened, savings products have performed poorly and many insurers are finding themselves in political crosshairs around policy wording and exclusions.

Even, and perhaps especially, during times like these, however, there are
opportunities abound. Seizing the opportunities presented to insurers at a time when investors are fearful, offers them the possibility to emerge stronger on the other side of this crisis and earn the ‘courage’ premium.

In this article we have highlighted the salient impacts on capital markets and what the likely consequences are for insurers. We have also considered a range of insurance lines of business and explored the potential impacts on these.

Finally, we discuss the way that insurers can use recent market developments positively to enhance the performance of their portfolios and make the most of the opportunities currently present in the market.

Read full reportSchroders - Covid-19 - How insurers can weather the storm - UK - vF - 19 May
0 pages314 KB

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Authors

Miguel Tizzone
Solutions Manager, Portfolio Solutions

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