COVID 19 pandemic has hit the economy hard. There is not a single business that has left unaffected by this ongoing crisis. The chaos and panic are taking their toll on the economy of every country. Also, people are facing salary cuts, job loss and businesses are going through huge decreases in demand for goods and services.
So the whole environment of business activity has come to a pause. The insurance sector is also facing the same challenges. However, according to a report by Swiss Re Institute, the insurance industry seems determined to overcome all this recession. It is predicted that all these insurance companies are doing a cut in the premiums considering the whole situation.
Moreover, it is predicted that the demand for insurance policies will go down more than the 1930s recession. The premiums will be lowered by 6% and 0.1% for life covers and nonlife covers respectively, estimation by Swiss Reinstitute suggests. However, there is also a good sign that says total premium restore to its pre-COVID situation in 2021.
Non-life premium volumes will cross the pre-crisis levels. Also, life volume may not be able to reach them before the stage. China will play a vital role in industry comeback. The group chief economist of Swiss Re, Jerome Jean has shown expectation of a V shape recovery like happened after the 2008-09 crisis.
The growth of life premiums will contract by 6%, though there was a remarkable positive growth in 2019. Moreover, the non-life premiums will see a little decrease of 0.1%. It is being tough to predict the future of the whole situation as the impact of the pandemic is yet to be analyzed as a whole.
