Insurance broker Willis Towers Watson on Friday estimated general insurance losses between $32 billion and $80 billion across key classes in the United States and UK from the novel coronavirus, surpassing claims from the 9/11 attacks.
A report by the broker showed early estimates for U.S. and UK business interruption, contingency, U.S. Directors & Officers, U.S. employment practices, liability, U.S. general liability, U.S. mortgage, trade credit and surety and U.S. workers' compensation.
An "optimistic" scenario or a return to a pre-COVID-19 state following 3 months of social distancing, would mean $11 billion of insured losses, while a "moderate" scenario, a gradual return following 6 months of social distancing, would mean a bill of $32 billion to insurers.
Social distancing for a year under a "severe" scenario – a health impact approaching the scale of the 1918 flu pandemic – will mean $80 billion in COVID-19 insured losses, Willis said.
Willis also said it has modeled an extreme pandemic scenario, which could result in $140 billion of losses.
"Beyond its devastating human cost, the COVID-19 pandemic has swiftly upended economic activity around the world," said Alice Underwood, global leader, insurance consulting and technology, at Willis.
"At this point, it appears that the industrywide level of general insurance loss could exceed that resulting from the 2001 World Trade Centre event."
Given the potential scale and systemic nature of pandemic loss, talks about the need for some sort of government backstop to address future pandemic risks have already begun, Underwood said.