Insurers Lobby For Federal Pandemic Insurance Program | Deep Insights

iLeads Mortgage Market Minute

Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading Berkshire Hathaway Fires Back In COVID-19 Coverage Dispute. This week we’re bringing you: Insurers Lobby For Federal Pandemic Insurance Program

 

QBE reveals forecast of first half results*

QBE Insurance Group, which will be officially releasing its first half financial results in August, has published its expected numbers – and the forecast isn’t rosy. In a July 22 update, the Sydney-headquartered global insurer said it expects a net statutory loss after tax of approximately $750 million for the period.

According to QBE, the preliminary figure largely reflects the impact of the coronavirus pandemic, catastrophe experience and prior accident year claims development, as well as a $125 million net investment loss due to extreme investment market volatility.

“While the landscape remains highly uncertain, at this stage QBE currently estimates total COVID-19 related costs to be around $600 million pre-tax,” stated the insurance group. Read more in-depth here.

 

W.R. Berkley reports lower profit as pandemic takes toll*

W.R. Berkley Corp.’s profit plummeted in the second quarter of 2020 as coronavirus-related losses hit the insurer and investment income fell.

The Greenwich, Connecticut-based company reported second-quarter net income of $71.3 million on Tuesday, compared with $216.7 million in the same period in 2019.

Berkley previously reported that its results would be hurt by $145 million in catastrophe losses, including $85 million in losses related to the COVID-19 pandemic.

In addition, second-quarter net investment income fell to $85.4 million, compared with $188.3 million in the same period last year.

“Net investment income was adversely impacted by a $58 million loss from investment funds, which are reported on a one-quarter lag. The loss was driven by the first quarter downturn in the financial markets resulting from the COVID-19 related economic shutdown,” a Berkley statement said.

Gross premiums written increased 2% to $2.13 billion. Read more in-depth here.

 

Insurers lobby for federal pandemic insurance program*

One look at the numbers, and the problem is clear.

U.S. businesses are losing an estimated $1 trillion a month as businesses are disrupted due to the coronavirus pandemic, according to estimates by the American Property Casualty Insurance Association. Yet, insurers collect only $4.5 billion a month for all commercial property policies.

This month, the groups representing the underwriters, the brokers and the agents are lobbying members of the House Financial Services Committee on a proposal to provide a type of pandemic coverage for the future.

The proposed Business Continuity Protection Program or BCPP would offer, in part, government-subsidized revenue replacement and protection for up to 80% of specific losses, like payroll expense or operational losses for up to three months.

The program would function something like the Federal Flood Insurance Program – with the government as the underwriter and insurers administering the policies. Read more in-depth here.

 

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