Traditional property and liability claims were subdued during national lockdowns, but this was more than outweighed by a surge in Covid-19-related claims notifications, particularly from the entertainment sector, according to a new report from Allianz Global Corporate & Specialty (AGCS).
The AGCS report, Covid-19 – Changing Claims Patterns, says a reduction in economic activity during lockdown phases resulted in fewer traditional property and liability claims, most notably in aviation and cargo, but also in many other sectors with fewer accidents at work, on the roads and in public spaces.
Thomas Sepp, chief claims officer at AGCS, said of the report’s findings: “The coronavirus outbreak has reduced risk in some areas while, at the same time, changing and heightening it in others. The wider changes in society and industry brought about and accelerated by the pandemic are likely to have a long-term impact on claims patterns and loss trends in the corporate insurance sector.”
“The growing reliance on technology, shift to remote working, reduction in air travel, expansion of green energy and infrastructure and a rethinking of global supply chains will all shape future loss trends for companies and their insurers.”
Estimates vary, but the insurance sector is currently expected to pay claims related to the pandemic of as much as $110 billion in 2020, according to Lloyd’s.
AGCS alone has reserved about $571 million for expected Covid-19-related claims, especially for the cancellation of live events and the disruption of movie or film productions in the entertainment sector.
Philipp Cremer, global head of claims at AGCS, said: “We have seen claims in some lines of business, such as entertainment insurance, surge during Covid-19, while traditional property and liability claims have been subdued during lockdown periods.”
“There is still the potential for claims to occur as factories and businesses restart after periods of hibernation, and given the longer development patterns for third-party claims in casualty lines.”
Claims notifications from motor accidents, slips and falls or workplace injuries slowed as more people stayed at home, and with the temporary closure of many shops, airports and businesses during lockdowns across the world.
AGCS also noticed a positive impact on US claims settlement from the suspension of courts and trials.
Some claimants and plaintiffs have been more open to negotiating settlements out of court rather than opting to wait a long time until their case is scheduled—a trend also highlighted in another recent AGCS publication on liability loss trends. In general, claims activity is likely to pick up again following resumption of economic activity.
The AGCS report goes o