Financial institutions will continue to face a fixed insurance market in 2021 due to ongoing pandemics and financial uncertainty and potential claims, according to a report published on Thursday by Allianz Global Corporate & Specialty SE.
COVID-19 can generate claims across almost all financial institutions insurance industries, AGCS, a unit of Allianz SE, the report said. Board members and salaried employees, professional compensation and errors and omissions can see claims, as well as criminal and cyber lines.
Market corrections and insolvency can affect financial institutions' balance sheets, increase exposures to their board members and result in lawsuits, the report reports. sade.
Claims may be made against board members if there has been a failure to anticipate or disclose COVID-1
"The financial services sector is facing a period of increased risk. COVID-19 has caused one of the biggest shocks ever to the global economy, triggering outstanding economic and fiscal stimulus and record levels of government debt," said Paul Schiavone, global
The prices of financial institutions' risks have increased and many insurance companies have limited capacity in certain areas where the exposures are highest, says the report.
. Financial and professional lines saw average first-quarter pricing increases of 40%, down from 45% in the previous quarter, according to Marsh LLC's latest global insurance market index, released earlier this week.
Compliance is one of the biggest drivers of insurance claims involving financial AGCS s owns.
Cyber incidents resulted in the most expensive claims for financial institutions, based on the AGCS analysis of 7,654 claims worth approximately $ 1.05 billion, reported from January 1, 2015 to March 31, 2021.
To date, the pandemic has not yet given rise to a large number of insurance claims for financial lines all, in part due to government support and stimulus packages, AGCS said.
Claims have emerged in only a few distinct areas, such as insurers' payment of business interruption claims and claims on banks regarding their administration of loans under the US Care Act Paycheck Protection Program.
A small number of claims have also been made by investors against asset managers who claim that they did not disclose risks associated with the pandemic, the report says.
More insurance and risk management news about the coronavirus crisis here .