A recent survey conducted by broker Gallagher found that the aviation sector caused the most apprehension for insurers with 26.9% of respondents listing it among the top three concerns in their portfolio.
The oil and gas sector (26.4%) came a close second in this list followed by tourism (10%) as well as the consumer and retail sectors (9%).
The survey was featured in the broker’s latest report and market update on structured credit and political risk insurance.
It had asked insurers to consider what they saw as the opportunities arising out of the current circumstances even though the full effect of COVID-19 on the broader political and economic landscape is yet to be fully realised.
Conducted between 24 June and 9 July, the survey solicited anonymous responses from individual underwriters covering the significant majority of the commercial insurance market engaged in this class. The findings represent responses from 76 individual underwriters, spanning 46 insurers.
With the impact of the current COVID-19 environment adjusting insurers’ risk appetite in different ways, the survey saw many comments which were largely connected to what insurers are seeking to avoid such as overloading with much more oil and gas as well as the aviation sector.
Despite the risk held in the market, the survey found that only 29% of respondents have been notified of claims “whether due to government action taken, or a deterioration in credit, that they consider specifically attributable to COVID-19”.
Commenting on the survey findings, Gallagher managing director Matthew Solley said, “The structured credit and political risk insurance market, as with many sectors, stands to be impacted by the broader consequences of COVID-19, in both a political and economic sense.”
However, he pointed out that market data proves an almost consistent growth in the insurance market’s support for the credit and political risk class – which on the one hand is led by capital of one form or another and on the other is met by demand.
“The market has weathered many storms, including the global financial crisis of 2008/09, and we expect the same of the current situation,” he said.