The impact of COVID-19 on the insurance industry

Abstract

This study analyses the impact of COVID-19 pandemics on the insurance industry. While COVID-19 increased morbidity and mortality other factors resulting from the pandemic benefit the industry. Overall, the response of the insurance industry to COVID-19 reflects other sectors in the market like transportation and trade. However, a structural downturn in the insurance industry like the one observed in 2016 was not found during the year 2020. We found that the insurance industry did not absorb extra losses during the year 2020 and did not suffer from the pandemics more than the economy as a whole. This article explores the past two decades and compares the structural break of the insurance industry in 2016 with that of 2020 due to the COVID-19 pandemic. In addition, during the year 2020, the returns to investors in the insurance industry were very similar to returns in the general market as measured by S&P500.