Briefing: Covid-19 - a ‘manageable’ global catastrophe?

By Yannick Guerry, editor, Insurance Times

A newfound wind of confidence is in the air. The catastrophic, game-changing event to end all events – namely Covid-19 – has now been relegated to a “manageable” loss.

That seems to be the growing consensus among analysts and industry consultants.

Swiss Re estimates the global losses for Covid-19 will be within the range of $50bn to $80bn, while investment bank Berenberg has framed it “more like a very large natural catastrophe event than an extraordinarily large one”.

Hyperion X, the data and analytics division of Hyperion Insurance Group, has described Covid-19 as “an earnings event” rather than a crisis for companies’ capital solvency.

So we can all breathe a sigh of relief. No need to pack up and head for that cabin in the woods just yet…

Really?

The Bank of England predicts unemployment to rise to 7.5% by the end of the year. The number of unoccupied premises in our towns and cities is expected to double by next year.

Plus 80% of SMEs are seeing their revenues declining, according to McKinsey. This crisis still has some way to go and that is assuming there won’t be repeated waves or new strains of this virus to come – which is a big assumption.

Yes, there are always winners from most crises and there will be opportunities from the emergence of new markets, as well as others exiting existing markets, but the economic impact of the Covid-19 pandemic is not something that can be written off as a managed event that will be forgotten.

It will leave behind long-lasting impacts on our economy, our society and the way businesses are run.