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Coronavirus – Possible impact on the insurance industry

Although South Africans are assured that measures are in place to detect, manage and contain any cases of the Coronavirus, what will the impact be on the insurance industry?

“Don’t look for much relief from insurers to cushion losses from cancelled events, travel disruptions and potential medical claims from the deadly Covid-19 virus that’s sweeping across the globe,” an article published in the Insurance Journal reads. It states that the world’s largest insurers have learned lessons from previous health crises, including the 2003 SARS outbreak and as a result have tightened up their policies, inserting communicable-disease exclusions to prevent potential losses.

“While there is a significant risk of disruption, coronavirus-related claims will be low,” analysts at Moody’s Investors Service reported. “Business interruption claims will be limited as these policies commonly exclude outbreaks of infectious disease, and pay out only if physical damage occurs.”

Here are some of the areas where insurers stand to be affected by the virus:

Health Insurance

While most of the industry nervously leafs through policies and counts its exposure, firms offering health insurance policies may actually get more business.

Events Insurance

Events are particularly susceptible to an epidemic, and a number of large corporate fairs and conferences have been scrapped or postponed. Expect a boom in teleconferencing.

Travel Insurance

The cost to insurers from payouts on travel insurance is likely to be minimal. Many travel policies exclude losses caused by epidemics, so unless consumers took out additional disruption cover they won’t be able to claim for cancelling travel plans, according to a statement on Allianz SE’s travel insurance website.

Credit Insurance

A slowing economy and lagging consumer spending could lead to higher claims for credit insurance, and the longer the outbreak continues, the bigger the impact could be on these companies.

Click here to read the article that also looks at the impact on financial markets.

Discovery also published an article about the virus. Click here to learn all about its symptoms, spread, prevention and treatment, keeping healthy while travelling and other important information.

The CMS has just published a media release focussing on Medical schemes and the coronavirus.

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