Oliver Wyman: How European Insurers can manage the impact of COVID-19

Executive summary :

The World Health Organisation declared the COVID-19 a public health emergency on January 30, 2020, as the pandemic spread across the world, threatening the global economy.

European insurers must prepare for the full impact of COVID-19

The situation is fast-moving, with every sector and facet of society affected. We share an overview of how European insurers are being impacted, as well as priorities to consider going forward.

COVID-19 IN INSURANCE: DISTURBANCE AHEAD

Businesses face immediate challenges, in particular the safety of employees and communities and implementation of business continuity plans. Rather than address these fast-changing issues here, we recommend you visit our Coronavirus hub. The hub is updated daily and contains our COVID-19 primer, perspectives on the epidemiology of the novel coronavirus 2019, updated projections of the potential impact of the pandemic, and our perspectives across industries and functions (including insurance risk functions).

Providing a high-level view of the impact of COVID-19 across insurance in Europe is challenging, given the differences in business models, business mix, and geographical or market-specific distinctions (for example, government-provided healthcare, distribution mix). There is also uncertainty as to how long this crisis will last and the longer-term impact on society and the economy.

We have considered the key emerging issues across commercial lines, personal lines, health, and life insurance. The impact on each area is very different: in some instances it is focused on insurance liabilities, in others on operational challenges, and in still others a change in asset values and Asset-Liability positions. For all, though, a prolonged economic downturn will have a profound impact on future business plans.

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