The lasting effects of the coronavirus crisis means that GI DWP will not return to previous levels until beyond 2023, predicts analytics company
Data analytics and consultancy firm GlobalData has forecast that general insurance direct written premium (DWP) will fall by 1.7% in 2020, compared to a 1.9% DWP growth spurt prior to the Covid-19 pandemic.
As part of its revised post-Covid-19 forecast, GlobalData also estimated that DWP in general insurance will regain a steady growth between 2021 and 2023. Despite this, DWP will still not reach pre-pandemic levels by 2023 due to the lasting impacts of the coronavirus outbreak.
Business interruption (BI) claims are expected to escalate in the UK because of the Covid-19-related national lockdown, GlobalData continued – the firm cited ABI forecasting, which predicted that more than 75% of claims in 2020 will be related to business interruption.
Deblina Mitra, insurance analyst at GlobalData, said: “The strong capital balances of top life insurers in the UK will partially insulate the impact of Covid-19. Notably, solvency II has helped insurers to shore up capital.
“Solvency II capital coverage ratios remained strong in the first quarter of 2020 for life insurers due to hedges against the falling interest rate and capital benefits driven by matching adjustments, amid wider credit spread.”
Alongside these financial figures, Mitra also highlighted a silver lining to the current crisis.
She added: “One lasting positive from the pandemic will be the improved digitalisation capacity that insurers have been forced to prioritise.
“They are digitalising key business processes including policy renewals, sales of new policies, claims management and customer relations to a greater extent.”