The U.S.’s auto, home, and commercial insurers have the financial resources to meet its obligations during the COVID-19 crisis, according to a presentation the Insurance Information Institute (Triple-I) delivered to state regulators.
“This year marks Triple-I’s sixtieth anniversary, and we are proud to be able to report before this forum that today that the property casualty (P/C) insurance industry is well-positioned to honor the promises it has made based on strong fundamentals, which include long-term risk management and an actuarially sound approach to underwriting,” said Sean Kevelighan, CEO, Triple-I, in remarks to the National Association of Insurance Commissioners (NAIC).
“It is important to appreciate that as much as this is a catastrophe of historic magnitude, there are more on the horizon—hurricanes, wildfires, floods—and we must remain prepared in the way that we have long-planned, so again, we can continue act as the financial first responder that we have been for several centuries,” Kevelighan stated.
Joined by Dr. Michel Léonard, CBE, vice president and senior economist, Triple-I, Kevelighan highlighted a few keys to the financial stability of the nation’s P/C insurers as a group, including its:
Policyholders’ surplus: U.S. P/C insurers’ cumulative assets exceeded its liabilities by more than $800 billion as of year-end 2019
Diverse investment portfolios: Nearly 80 percent of P/C insurers’ portfolio exposure is to non-stock assets, such as high-quality corporate and municipal bonds
Reinsurance: U.S. P/C insurers’ ability to access global reinsurance markets allow them to spread U.S. financial risks worldwide
In an analysis of the current U.S. P/C insurance markets, Dr. Léonard told the NAIC’s special session on COVID-19 that workers’ compensation insurers providing coverage to hospitals and first responders faced the highest potential exposure to COVID-19 related claims. Liability and directors and officers (D&O) insurers who cover health care, transportation, retail and pharmaceutical businesses have moderate exposure, Dr. Léonard added.
Insurance Information Institute
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