UK insurance group Aviva has revealed that its gross losses from the Covid-19 pandemic rose to around US $580 million for the first-half of the year, but the company expects its reinsurance panel will take roughly 63% of the costs of its hands.
Aviva reported incurred claims losses from the pandemic have now risen to UK £441 million, which is around US $580 million at today’s rate.
The claims suffered are largely from business interruption and travel related claims insured by the Group, as well as some impacts from increased mortality and in its health and savings business, all partially offset by a reduction in frequency of motor claim.
Of the total claims burden expected, Aviva revealed this morning that it expects significant reinsurance support for the Covid-19 pandemic.
In fact, the insurer expects reinsurance carriers will take around 63% of the total, or UK £276 million, which is around US $365 million at today’s rate.
That will leave Aviva with a net retention of Covid-19 pandemic losses for the first-half of UK £165 million, after reinsurance.
It’s a sign of just how much of the pandemics financial impacts are set to flow through to reinsurance markets, at least in some cases where robust and well-reinsured carriers are concerned.
This is a relatively high cession rate it seems, suggesting Aviva had a well-calibrated reinsurance program that has responded positively to the pandemic.
Of course, every reinsurance program is different, so it’s important not to read too much into Aviva’s experience alone. But it does show that, at least in some cases, reinsurers are set to take the lions share of a carriers pandemic losses.
Aviva to pass around $365m of Covid-19 losses to reinsurers was published by: www.Artemis.bm
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Original Article Posted at : https://www.artemis.bm/news/aviva-to-pass-around-365m-of-covid-19-losses-to-reinsurers/