The COVID-19 epidemic has made it such that insurers are expressing uncertainty at their ability to forecast for 2020. The virus seen major impacts on various nations across the world, with each market responding differently to the outbreak.
Due to considerations regarding rate of spread (determined by government and public reaction to the virus), mortality rate (determined by demographics in the nation), and how each market will be affected economically, it is understandably difficult for any (re)insurer to figure out how well their company might be doing this year.
Already, several insurers have come out to say as much.
Generali stated in its 2019 financial report that, “in a context of greater uncertainty and volatility due to the further spread of COVID-19, Generali stated that it is not currently possible to make a reasonable estimate of the medium-term impact”.
Global reinsurer SCOR said in its financial report that, “there is significant uncertainty about the potential impact of the pandemic based upon current information. SCOR will continue to regularly assess the COVID-19 impact on its business”.
In Singapore, a recent survey by the Monetary Authority of Singapore revealed an overall pessimistic outlook for the year. Singapore itself downgraded its GDP forecast amidst the outbreak, leading survey respondents to adopt a similarly gloomy view. The finance and insurance industry in particular expects to see a growth of 2.6%, rather than the previously predicted 3.5%.
Meanwhile, analysts have looked into how bad the global economy might get due to this pandemic. The Organization for Economic Cooperation and Development said that if the coronavirus continues to spread, it could cut the year’s global growth to 1.5% for the year instead of the 2.9% it had forecasted prior to the virus’ global spread.
Global output was $86.5tn last year, so that means $1.5tn of economic activity could be lost to the disease, said RMS chief research officer Robert Muir-Wood. ““The only thing we’ve ever had which was bigger than that was the  banking crisis,” he said. ““This is likely a one-in-a-100-year event that we have to live through, and there’s still quite a lot ahead of us,” he said.