Evan Greenberg, CEO of Chubb, said that Covid-19 will cause a historic level of turmoil for the global insurance industry, with far-reaching impacts on both liability and assets. One of the reasons a pandemic such as this is so devastating, he pointed out in a recent interview, is that there is no geographical or temporal time limit – effectively, there is no definitive end in sight for such an event. Claims continue to flood in, and on top of dealing with those, insurers must also manage their own businesses and the ongoing turmoil in world markets.

Chubb itself has registered US$13 million in losses related to the pandemic in Q1 of 2020, and the insurer expects that the second quarter will see similarly ‘meaningful impacts’ – although in the case of Chubb, Greenberg said that that while earnings will be affected, the insurer’s capital position will not be affected. Of course, this will not be the case for other insurance entities whose starting position is more precarious than the likes of Chubb.

“We’re in an unprecedented moment of historic proportions,” said Greenberg. “None of us living today has experienced an event of this nature or magnitude. It is at once surreal and catastrophic. We will manage through and heal both our society and economy, [but] it will take time.”

Looking at the reinsurance side of things, James Kent, Global CEO of Willis Re – which has released the Covid-19 Impact Report looking at the likely impact of coronavirus related claims – said that due to the high levels of uncertainty for both sides of reinsurers’ balance sheet, a capital squeeze is ‘increasingly likely’. “The most successful strategies will see executive teams assimilate the current trading environment as it relates to them directly, respond with clarity and direction with support from their advisory partners, and articulate to relevant stakeholders an appropriate route forward,” he said. “Reinsurance capital will play a key role in supporting this future direction as companies seek to support the rehabilitation of the global economy, with the insurance industry continuing to be a fundamental element in supporting the recovery efforts of its customers.”

Willis Re’s Co-Head of Global Analytics Printhan Sothinathan said that claims resulting from Covid-19 would likely be manageable overall – ‘in all but a worst-case scenario’ – though some reinsurers will find the crisis more difficult to navigate than others.