Insurance industry losses from Covid-19 are estimated at around $44bn, says Allianz in its recent Global Claims Review 2022.
This fact has made the pandemic the third largest catastrophe loss behind Hurricane Katrina and the 9/11 attacks.
The bulk of corporate claims have been from event cancellation insurance and business interruption claims from companies affected by lockdowns.
The economic environment in the aftermath of the pandemic does pose a heightened risk for D&O and professional indemnity insurance as the number of D&O claims typically rises during times of financial market volatility.
Inflation and rising interest rates, together with the war in Ukraine, have already seen signs of volatility emerge in the markets, such as recent falls in the values of tech stocks, so-called Special Purpose Acquisition Companies (SPACs) – or blank-cheque companies – and cryptocurrencies.
What is more, D&O claims continue to be dominated by so-called “event driven” losses, although accounting issues and insolvency remain an important driver for many claims. Recent years have seen large D&O claims arising from a wide range of events, including natural catastrophes, the Covid-19 pandemic, air crashes, emissions scandals, cyber-attacks and product liability. A number of trends are likely to keep loss activity elevated for the foreseeable future.
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