31.9 C
Thursday, November 24, 2022

Read Online

Chubb Estimates $1.4bn in Q2 Global Losses Tied to Coronavirus

Chubb’s disclosure of second quarter 2020 global net catastrophe losses underscores the damage COVID-19 is doing to some carriers’ bottom lines.

The global property/casualty insurer estimated $1.8 billion in pretax catastrophe losses for Q2, or $1.5 billion after tax. Of that number, close to $1.4 billion in pretax catastrophe losses stem from the coronavirus pandemic, or $1.15 billion after tax. Losses from severe U.S. weather events and U.S. civil unrest constitute the difference, Chubb said.

Chubb released its Q2 catastrophe loss estimates on July 6 after the markets closed.

Coronavirus losses could be an issue for some time, Chubb Chairman and CEO Evan Greenberg suggested during his comments about 2020 first-quarter earnings earlier this year. “In this case the degree of revenue impact is simply unknowable,” Greenberg said at the time.

According to the insurer, its pretax catastrophe loss estimate includes $605 million in short-tail losses generated primarily from entertainment and commercial property-related business interruption and accident and health (A&H) products including travel insurance products, and $553 million in losses related to liability insurance products, including professional liability (directors and officers, employment practices, professional liability, etc.) and workers compensation and other liability-related products.

The estimate also includes $107 million stemming from insurance credit exposures including surety, political risk and trade credit.

Substantially all of the losses for liability and credit-related insurance products are classified as incurred but not reported (IBNR) reserves, Chubb said. The loss estimate also includes a $100 million IBNR provision to account for the additional uncertainty in the estimates around the company’s property, casualty and credit-related exposures, given this unprecedented event.

Approximately 71 percent of the COVID-19 estimate relates to the company’s North America Commercial P/C Insurance segment and 28 percent covers the Overseas General Insurance segment.




Business Journal
We deliver business news that are professionally crafted and tailored to give you business freedom and expression that is aimed at increasing your spirit of enterprise.

Related Articles

- Advertisement -

Stay Connected

- Proud Member -spot_img
- Advertisement -

Latest Articles