The COVID-19 pandemic appears to be doing little to slow issuance of catastrophe bonds and other insurance-linked securities, with issuers bringing $6.1 billion to market thus far in 2020, according to data from the Artemis Deal Directory. There has been $1.06 billion in issuance so far during the second quarter.
As businesses cope with the COVID-19 pandemic and move toward reopening, the management of the process-and the risks involved-can vary significantly from country to country. A panel of risk managers noted that different pandemic responses employed by various countries add complexity to the process.
A "moderate" loss scenario for property-casualty insurance lines most likely to be affected by COVID-19 in the US and UK markets could reach $32 billion, according to an analysis by Willis Towers Watson, while a "severe" scenario projects $80 billion in losses.
Don't miss the May issue of "Captive Insurance Company Reports" ("CICR"), in which John Thomson, "CICR" editor, discusses the ramifications of the novel coronavirus (COVID-19) and the risk management implications, including a role for captives.
An updated analysis suggests that monthly COVID-19-related business interruption (BI) losses for US businesses with fewer than 500 employees could range as high as $668 billion per month. Those numbers dwarf the premiums for commercial property risks in the key insurance lines which are estimated at $4.5 billion per month.