Kroll Bond Rating Agency (KBRA) releases updated views about COVID-19’s implications for the global insurance sector.

COVID-19 is now officially a pandemic with unprecedented consequences. In this report, KBRA updates our previous views on the implications of the COVID-19 crisis for the life and property and casualty (P&C) insurance subsectors. We also provide a summary of certain topics that have developed since our previous reports and give a brief outlook. KBRA notes that the situation is developing rapidly and what is unthinkable today could become tomorrow’s reality. We will continue to update our views over time.

Insurers’ coronavirus-related disclosures have, for now, been somewhat reassuring given the current extreme circumstances. Still, KBRA believes the COVID-19 crisis is a credit negative for the sector and will be especially challenging for those insurers without adequate risk management programs. Underwriting losses, in particular on the P&C side, could become a material earnings event for certain industrial and commercial line insurers. Carriers in the U.S. could face potential regulatory and legal risks if retroactive legislation to extend coverage to include coronavirus-related losses were to pass. And while there are many credit-negative implications to COVID-19, KBRA believes that many insurers are positioned to manage the crisis, continuing to serve their customers, creditors, and counterparties.

Click here to view the report.

Topics