‘Viruses do not recognise borders’
Trump asserted that the new rules would go into effect on Friday 13 March at midnight. "To keep new cases from entering our shores, we will be suspending all travel from Europe," Trump said from the Oval Office on Wednesday evening. His reasoning was that the European Union had failed to take the ‘same precautions’ as the US in fighting the virus, but that the ‘strong but necessary’ restrictions would not apply to the UK.
In response to Trump’s extreme measures, European politicians from the 26-nation Schengen zone have aired their concerns over the economic impact this would likely cause.
“Following the travel ban @realDonaldTrump announced, we will assess the situation today,” tweeted President of the European Council Charles Michel. “Economic disruption must be avoided. #Europe is taking all necessary measures to contain the spread of the #COVID19 virus, limit the number of affected people and support research.”
And Alexander Stubb, the former Finnish Foreign Minister, tweeted: “Any attempt to contain the #CoronaOutbreak is welcome, but the decision of @realDonaldTrump to exclude the UK from a European travel ban is nothing short of irresponsible. Viruses do not recognise borders. Decisions should be based on facts, not politics.”
A global recession
While Trump’s contradictory tweets do little to reassure anyone about the impacts the travel restrictions will have on trade, one thing can be certain: as the virus causes upheaval in stock markets and disrupted global supply chains, the odds of a global recession have risen dramatically.
Insurance solution provider Stubben Edge Group’s latest research reveals that in the last two weeks, the stock market has seen its biggest drop-off since the 2008 financial crisis. “The MSCI World Index has fallen by more than 10 per cent, erasing some £4.6 trillion from the value of listed corporations,” explained Danny Stanvliet, Stubben Edge’s Head of Analytics.
Stubben Edge Group added that another global pandemic such as the 2003 SARS outbreak will most likely lead to a global recession – reducing global GDP between one per cent and 10 per cent.
Stubben Edge Group asserts that three major insurance areas already being affected by Covid-19 are health, travel and life insurance. “From an insurer’s perspective, it’s low likelihood, high severity and complete uncertainty – hence why they would rather not include it in their insurance offerings,” explained Stanvliet.
Already, travel insurance claims have sharply increased due to cancelled trips; companies experiencing disruption will expect their insurers to absorb the financial losses and life insurers will see a spike in claims as the death toll associated with the coronavirus increases.
It’s therefore unsurprising that insurance giant Aviva has revised its offering for new policyholders; and that, more recently, travel insurance provider LV decided to stop selling as the coronavirus pandemic continues.
“Sorry, we’re unable to give you a quote at the moment,” reads LV’s message on its website. “In light of the impact that coronavirus (COVID-19) is having globally, we’ve made the difficult decision to pause the sale of travel insurance to new customers. We considered a number of options, such as excluding cover or increasing prices for new customers, but we believe temporarily pausing the sale of new policies and focusing on our existing customers is the right decision.”