...to affect either many different lines of business across diverse geographies at once, or impact a single line of business profoundly.
COVID-19 neatly illustrated the ability of a single peril or risk to simultaneously impact numerous lines of insurance business across the globe. Governmental reforms that were implemented post the Great Financial Crash in 2007/2008, “proved successful in preventing the failure of large financial firms that would otherwise result in ‘bailouts’… but [were] unsuccessful in creating a more resilient financial system that could withstand sudden shocks without resorting to large-scale government intervention to maintain stability at the first signs of panic.”[1]
While the (re)insurance industry proved resilient throughout the pandemic, with COVID-19 losses largely managed within the industry’s expected earnings tolerance, the limitations on coverage provided were not well understood in advance and did not support as meaningful a response to the substantial loss that occurred as many desired. As a result, the (re)insurance industry has not provided broad economic backing. Instead, governments had to step in to provide financial support to safeguard society, their citizens and their economies.
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- Managing Systemic Risk in the (Re)insurance Market .pdf • 0,11 MB
