Re/insurance: "The recapitalisation challenge for Lloyd’s (& ILS) while Covid-19 persists"

From Artemis:

As our sister publication Reinsurance News reported yesterday afternoon, Lloyd’s has asked its members that have been hit by sizeable losses as a result of the Covid-19 coronavirus pandemic to accelerate capital injections with the goal of stabilising the markets capital position.

Rating agency S&P Global Ratings explained that currently losses from Covid-19 falling to Lloyd’s are thought to remain an earnings event, rather than a capital hit, but it is still early days and the losses are only going to continue to flow.

“The market might experience more substantial losses if the COVID-19 pandemic were to extend for a more significant part of 2020,” S&P warned.

While some governments begin to talk about how to end the global lockdown of people and business activity, it is hard to envision a world getting back to normal by the end of this year at this time, suggesting ongoing flows of coronavirus losses remain possible.

At the moment S&P highlights that, “Lloyd’s has endured losses on its underwriting portfolio, mainly relating to event cancellation cover and pandemic business interruption cover.”
The range of business lines facing losses is much broader though and there is a likelihood that losses begin to fall into other areas of the insurance and reinsurance market over time.

Alone, these may not be significant, but on an aggregated basis, across the Lloyd’s insurance and reinsurance market, it seems likely the coronavirus claims volume will be significant right through 2020 and perhaps beyond....

....MUCH MORE