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COVID-19 claims so far likely to be manageable; reinsurers de-risking:Willis Re Report

Reinsurers have showed that the systemic shock of COVID-19 is manageable so far, but the future strength of the sector depends on the severity of the pandemic’s continuing impact on health and economies. The industry retains sufficient capital buffer for extreme events, but the extent to which reinsurers can withstand continued asset-side volatility and increased claims emergence remains to be seen.

Reinsurers have started to de-risk their balance sheets by holding cash, which will have a significant impact on investment returns. Willis Re currently estimates a 5% hit to the global reinsurance capital base, roughly US$30 billion pre-tax.

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‘Virus will be with us for a long time’, WHO chief warns

“Most countries are still in the early stages of their epidemics and some that were affected early in the pandemic are starting to see a resurgence in cases,” Tedros told Geneva journalists in a virtual briefing.

“Make no mistake we have a long way to go. This virus will be with us for a long time,” he said, while noting that epidemics in Western Europe appear to be stabilising or declining.

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Global reinsurer capital rose by 7% to $625 billion in 2019,Net income of 23 large global reinsurers almost doubles to $18.2 billion

Mike Van Slooten, Head of Business Intelligence for Reinsurance Solutions, and author of the ARA report, said: “Reinsurers faced a challenging operating environment in 2019. On the underwriting side, carriers were confronted with higher retrocessional costs, adverse development of recent catastrophe losses, and deteriorating trends in US casualty business. At the same time, interest rates in the key US and UK markets went into reverse, as policymakers sought to address worsening prospects for global economic growth.”

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US State files lawsuit against China on coronavirus handling

The lawsuit alleges that during the critical weeks of the initial outbreak, the Chinese authorities deceived the public, suppressed crucial information, arrested whistleblowers, denied human-to-human transmission in the face of mounting evidence, destroyed critical medical research, permitted millions of people to be exposed to the virus, and even hoarded personal protective equipment (PPE, causing a global pandemic that was unnecessary and preventable.

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Virus upends outsourcing as firms ‘Reshore’, Embrace AI

But the bigger lasting change from the pandemic will likely involve the wider use of artificial intelligence to handle tasks currently performed by human beings, experts said.

“AI doesn’t go on strike, it can work 24/7 and throws up fewer complications,” said Michael Czinkota, who teaches international business at Washington’s Georgetown University.

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