The Chairman of Lloyd’s of London, Bruce Carnegie-Brown, said at a recent Reuters event that the global insured loss from the ongoing COVID-19 pandemic will exceed the market’s previous estimate of $107 billion.
According to Carnegie-Brown, Lloyd’s is facing claims from 16 different lines of business and during the event, he stressed how unlike other loss events, COVID-19 is everywhere at the same time and has persisted longer than anticipated.
As shown by publicly reported COVID-19-related losses, IBNR reserves and estimates from insurance and reinsurance companies, the figure is currently running far below this total and at this time, it remains unclear exactly how the losses catch up to the amount suggested by Carnegie-Brown.
This suggests that some surprises could be on the way, or that overall losses from the ongoing pandemic may not become clear until much further into the future, but emerge from this current underwriting cycle.
19th November 2020 - Author: Luke Gallin Reinsurance News
Under-reserving is a worry for all insurers made more challenging with long tails and not having sufficient data to analyse. It is a worry that typically an insurer analyses only 80% of the data stored across the enterprise. Data silos, incompatible core systems inherited over decades of M&A and that curse of the industry- unstructured data.
The amount of data stored as unstructured text is amazing and daunting. Emails, invoices, accounts, letters, reports- the list goes on and on. You would not trust a Sat-Nav system that could only included analyse 20% of road data in its database.
Yet that is what most insurers do everyday as their decision making, automated processes and analytics are unable to access this majority of unstructured data.
What to do about it?
Platforms like 360Retrieve already bridge the gap giving insurers a complete picture of the past, present and better predictions of the future. 360Retrieve was the critical success factor for insurers needing to cope with the earlier surges of travel cancellation and current wave of Business Interruption claims.
Analysing the hidden unstructured data to help insurers cope with and better manage these claims.
Worth a look when it comes to the claims insured loss associated with COVID-19 and, for that matter, all other lines of business.
Being able to access this 'hidden' data is also essential to more rigorous writing of risk and the whole rebroking area. Time to reveal the hidden 80% of data.
Back in May, the specialist insurance and reinsurance marketplace said that it expects to pay customers up to $4.3 billion in claims due to the pandemic, while industry-wide losses were expected to reach $107 billion. However, speaking at the Reuters Future of Insurance USA conference on Wednesday, Carnegie-Brown said that pandemic-related losses will be similar to the significant $144 billion of re/insured catastrophe losses experienced in 2017, driven by Hurricanes Harvey, Irma, and Maria.