Global pandemic COVID-19 has resulted in the disruption of all the conventional ways of business. Demand has dropped drastically but the maintenance cost is still the same. Every business is struggling hard to pay its employees. Employees are working from home and the old-style 9-5 office no more exists.
Most of the markets, offices are closed. The same problems are being faced by the Insurance industry also. They are facing a huge drop in the premiums, facing problems due to COVID claims, and struggling with other problems also.
According to a report by Reuters, many insurance companies are showing more interest in commercial warehouses as compared to the office spaces. Also, the insecurity and work style ignited by Corona is making them invest more in the commercial warehouses.
According to Goldman Sachs Asset Management (GSAM), Insurance companies are exchanging their investment in office space and other properties. This is for the investment in warehouses. The demand for warehouses has seen a very stiff rise. Moreover, the uncertainty around the end of COVID is high.
And hence, companies are giving second thinking about their possession of office space and other real estate assets. This will change the whole scenario around real estate pricing and rent. The thinking of insurance companies is justified as people are moving their business to the online market. They are doing all their business dealing through the internet.
But here one thing should be noted that it is tough to divest the old investment and it’s tougher in an environment induced by a global pandemic. Looking at all these situations we have to say that COVI D-19 will leave an impact of ages on all the industries.