The insurance group explained that a reduced demand for travel insurance caused by a sharp decline in sales at Cover-More, alongside reduced life insurance operations due to adverse disability claims, effected a 56-per-cent decline in the company’s earnings for its Asia-Pacific business. Overall, Zurich’s operating profit fell to US$1.7 billion, as Covid-19 wiped $686 million from its result.
“[Cover-More] saw a sharp decline in sales starting from March as a result of widespread travel restrictions which were imposed to counter the Covid-19 outbreak,” Zurich said. “In light of the expected slow recovery in demand for travel insurance, the group is actively managing costs of the Cover-More business, while positioning the company for longer term recovery by increasing the focus on digital and assistance services.”
Zurich also affirmed an earlier estimate for P&C claims from Covid-19 of $750 million, comprising 80 per cent P&C claims and eight per cent due to claims in special lines, including travel – notably, $37 million at Cover-More.
“The pandemic will have lasting effects,” Global CEO Mario Greco said, touching upon the possibility of recession, civil unrest, and a higher rate of natural catastrophes. “We are focused on understanding these and adapting our thinking to ensure that we can continue to drive the business forward and deliver on the plans presented last November.”