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Fitch Ratings changes outlook of London insurance market to negative due to COVID-19 outbreak

Fitch Ratings changed forecast of London insurance market from stable to negative due to growing concern about the consequences of COVID-19 outbreak, writes Forinshurer.
Fitch Ratings changes outlook of London insurance market to negative due to COVID-19 outbreak

The British Prime Minister Boris Johnson has taken tough measures to socially distance the British population in order to mitigate the coronavirus spread and impact.

According to analysts, the ratings of London insurance companies will be less affected by the virus outbreak than the ratings of European life insurers. However, the Fitch experts believe that ultimately the combination of falling equity markets, expanding credit spreads and declining interest rates is a negative factor for the capital.

It is expected that the impact on underwriting performance of London market insurers will be more limited; however, the greatest impact will be due to cancellation of events, interruption of work, as well as accidents and health conditions.

Numerous major sportive and musical events have already been canceled or delayed due to coronavirus outbreak, and the number of victims is expected to increase in the coming weeks as the virus continues to spread worldwide.

It seems that the 2020 Olympic Games in Tokyo, for the cancellation of which Swiss Re will pay $250 million, are likely to be either postponed or canceled, as many countries refuse to send athletes to the games this year, which are scheduled for the end of July 2020.

Analysts report that business interruption losses are expected to be low due to exclusion of virus outbreak from the coverage, although there is likely to be some impact as companies are already acquiring extensions for insurance coverage.

Source: https://forinsurer.com/news/20/04/02/37808

Photos are from open sources. 

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