Lloyd’s forecasts pandemic will be among costliest events in industry’s history
"Some interesting numbers this AM from Oliver Ralph at the FT. Specifically, just over half the cost is coming from claims payouts, while the other half caused by a loss in investment returns. This means its fast approaching the 2005 hurricane losses! Key losses include: Business Interruption, Trade Credit and Event cancellation. Lloyds have also set aside £15m to look at future ways to deal with pandemics, along with Ed Gaze, Trevor Maynard and the team launching a COVID-19 specific cohort for the Lloyds Labs."
Nigel Walsh Partner at Deloitte on LinkedIn today
No wonder shoring up reserves is a priority.
Timely paper from KPMG "COVID-19: could liquidity challenges be on the way for insurers?"
Looks like writing on wall for expensive, complex, inflexible and sclerotic core systems at insurers even if, for the moment, the priority is to keep them running and "sweat the assets". Hence the global search for COBOL expertise.
When it comes to upgrades or new versions looks like "Think again!" will be the instruction from the C-Suite. We've had enough of spending $millions (times ten or even a hundred). If you cant make them work then find lower cost, simpler, flexible, faster time to value that we can run without being dependent on an army of developers.
What about this No Code software we keep hearing about?
The coronavirus pandemic will cost the insurance industry more than $200bn according to new forecasts from Lloyd’s of London. Just over half of the $203bn estimated loss relates to claims, with insurers expecting to pay out for events cancellation, business interruption and trade credit cover. Another $96bn comes from investment losses, where turmoil in financial markets has hit the assets insurers hold to fund claims. “This is a loss of a magnitude that none of us have seen in our lifetime,” said John Neal, Lloyd’s chief executive.