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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