Insurers Brace for Earnings Stress
Standard & Poor’s Global Ratings reports that the effect of the coronavirus on capital markets will likely influence U.S. insurance company earnings in the first quarter of 2020. However, underwriting performance will likely not be affected.
S&P Global Ratings Credit Analyst Stephen Guijarro explains, “Property and casualty insurers’ underwriting performance for the first quarter will be the least affected of the three sectors from this pandemic. However, for the remainder of 2020, as continued shelter-in-place restrictions further stress economic disruption, we will keep a close eye on state legislative initiatives attempting to override standard exclusions in business interruption polices.” He adds, “While pandemic risk has long been an excluded cover for business interruption policies, a few states have sought to pass legislation to force insurers to pay for these coverages to specifically assist small businesses.”