Surviving the COVID-19 Crisis - Life-Annuity Insurers Focus on Risk and Opportunity
Conning: Surviving the COVID-19 Crisis -
Life-Annuity Insurers Focus on
Risk and Opportunity
- The life industry’s capital levels will be challenged by excess mortality, prolonged low interest rates, and increased asset risk.
- Death claims, to date, have been manageable, but the economic slowdown will likely have long-lasting impacts on the industry’s investment return and embedded risk.
- Operational challenges from the lockdown have led to a long-overdue acceleration of the digitization of life business.
HARTFORD, CT – September 30, 2020 – The COVID-19 pandemic and economic crisis is a unique combination of an excess mortality crisis caused by the disease, a global economic lockdown, and the responses to that lockdown. Layered on top of these are the operational challenges presented by suddenly having face-to-face sales interrupted and having to implement a work-from-home regime. Operational risk has rarely hit the industry for such an extended period before.
The Conning study, “Surviving the COVID-19 Crisis - Life-Annuity Insurers Focus on Risk and Opportunity” explores these overlapping crises and how the industry has responded to them. Further, it analyzes how these risks may continue to unfold so companies can prepare for the future.
“The combination of these risks creates large headwinds against the life-annuity industry. Life insurers need to manage the short-term effects of the crisis, while not causing longer-term problems for themselves.” said Mary Pat Campbell, a Vice President, Insurance Research at Conning. “To survive the pandemic crisis and thrive in its aftermath is the ultimate goal.”
“The good news is that the life industry entered this crisis with a stronger capital base and higher risk-based capital levels than it did in 2008. Six months into the crisis, it is clear that well-managed life insurers will be able to focus more on the opportunities that will arise from the crisis, while redoubling efforts to address the yet lower interest rates” said Steve Webersen, Head of Insurance Research at Conning. “This crisis is an opportunity for companies to accelerate the digitization of their sales and operations, something that is long overdue.”
“Surviving the COVID-19 Crisis – Life-Annuity Insurers Focus on Risk and Opportunity” is available for purchase from Conning by calling (888) 707-1177 or by visiting www.conningresearch.com.
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ABOUT CONNINGConning (www.conning.com) is a leading investment management firm with a long history of serving the insurance industry. Conning supports institutional investors, including pension plans, with investment solutions and asset management offerings, risk modeling software, and industry research. Founded in 1912, Conning has investment centers in Asia, Europe and North America.
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Director, Insurance Research