The COVID-19 pandemic continues to depress growth across the world with nearly every country experiencing negative growth and recession. Overall, benchmark GDP forecasts for 2020 and 2021 have been worsening over the last three months pointing to a deeper and wider impact by COVID-19 on global GDP growth than initially forecasted at the pandemic’s onset, according to a new Insurance Information Institute (Triple-I) report.

2020 first-quarter data in comparison to both the previous quarter and the first quarters of prior years, gave little hint of the shock that was to follow in 2020’s second quarter. Indeed, for the property/casualty (P/C) insurance industry, the first quarter of 2020 generally went well. Although there were some bumps in the road—policyholders’ surplus fell by $75 billion, or -9.0 percent, from the 2019 year-end level—most measures of financial results (premiums, underwriting results, investments, surplus level in relation to net written premiums, and profitability) were positive. The industry results were released by ISO, a Verisk Analytics company, and the American Property Casualty Insurance Association (APCIA). A discussion of the key drivers of the quarter’s performance follows.

The Insurance Information Institute's Global Macro and Insurance Outlook was written by Dr. Michel Leonard, CBE, vice president and senior economist. Before offering an assessment of the Global Insurance Outlook, Dr. Léonard’s report gives a Global Macro overview of the variables which impact all economies: Growth & Inflation, Monetary & Fiscal Policy, and Political Risks.

2019 was a solid, profitable year for the property/casualty (P/C) industry, with contributions to profit from both insurance and investment operations. Net income after taxes was $61.4 billion.
The combined ratio for 2019 was 98.9, slightly better than the 99.2 in 2018.
At the end of 2019, industry surplus attained its highest-ever level—$847.8 billion. This was driven largely by unrealized capital gains from a soaring stock market in the second, third, and fourth quarters of the year and declining interest rates.

The COVID-19 pandemic–and how governments, businesses and individuals react to it–raises many issues relevant to property/casualty (P/C) insurers and their customers. As a trusted source of unique, data-driven insights on insurance, Triple-I tracks and reports on these multi-faceted issues. We have created and curated information and resources to help you navigate P/C insurance issues in this rapidly changing environment.

The Insurance Information Institute's (Triple-I) Global Macro and Insurance Outlook was written by Dr. Michel Leonard, CBE, vice president and senior economist.

The Triple-I's Global Macro and Insurance Outlook notes the following key points in the report:

For the first three quarters of 2019, the property/casualty industry’s financial results were quite profitable, and roughly comparable to 2018 results.

Highlights