Insurance Risk Management During Pandemics
The insurance sector plays a key role in absorbing systemic risks under normal conditions and its role is particularly important in taking losses following a pandemic or natural catastrophe. Strong risk management and contingency planning frameworks have ensured that insurers and reinsurers are well capitalised to withstand the economic shock of a pandemic. An estimate of the current impact of the coronavirus puts losses at more than US $200 billion, half of which is attributed to general insurance business, and the other half is attributed to losses due to volatile investment markets.
Keywords: Solvency ratio • Credit default risk • Market risks • Pandemics • Business interruption risk • Solvency 2