Many insurers have bounced back financially from the Covid-19 pandemic in the first six months of 2021, yet uncertainty around upcoming claims trends means bottom lines are not out of the woods yet
Last month saw a flurry of insurers and brokers publish their 2021 half year financial results, presenting a mixed bag of ongoing Covid implications, optimism for a second half out of lockdown and profits returning amid the UK’s ‘new normal’.
Among those that performed well are Aviva, which boosted its UKGI operating profit to £169m for the first half of 2021 compared to a loss of £66m last year, and Zurich UK, which also improved its operating profit to £230m in 2021’s H1 versus a loss of £35m for the same period in 2020.
Hiscox, which was one of the more visible insurers participating in the business interruption test case action last year, had a positive first half too, reporting profit before tax of $133.4m (£97.2m) in the six months to 30 June 2021, compared to a loss of $138.9m (£101.2m) over the same period in 2020.
Furthermore, Axa was able to bolster its group-wide property and casualty underlying earnings by 323%, thanks to a decided absence of Covid-19-linked claims.
One fly in the ointment, however, came from Allianz Holdings, which reported a decline in gross written premium across all areas of its business for the first half of 2021, due to the continuing impact of the pandemic, competitive market conditions and portfolio run-offs.
For example, group operating profit decreased by 6%, falling from £179m in H1 2020 to £169m this year.
Despite bottom lines clearly recovering following the coronavirus sucker punch that summed up the last financial year, insurance bosses are still tentative about what’s ahead in 2021’s H2.
Understandably, many are keeping quiet about possible trends and outcomes due to the relative newness of lifted lockdown restrictions and an uncertainty about how the public and businesses will react as we progress into the autumn, where there is the potential for pre-pandemic habits to resume.
Businesses can’t afford to be lulled into a false sense of security following the removal of Covid-induced restrictions, however. Broker-led risk management will still be crucial in H2 as claims trends have yet to be unveiled.
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