Property casualty insurance is an interesting beast. Whereas life, health and pension are defined by what they cover, P&C – as a label – scarcely does justice to its scope. At a moment like this, it seems more fitting to apply the more apt, if nebulous, term “general insurance” to consider how actuarial practice will be impacted by the COVID-19 pandemic. Is there any aspect of our lives which has been untouched by the disease raging through every country on earth? And where lives, technologies and societies are affected, where risk changes, actuaries are present.
I’ve written a short brief about the potential impacts of COVID-19 on the P&C industry. This is by no means the final word. Our hope is that it starts the conversation about what might happen next. There are a number of questions that the profession will face in the coming months and years. Among them:
· To what extent, if any, was this risk underpriced?
· Given the dramatic cessation of economic activity, what lines may have been overpriced? Was such a scenario foreseeable?
· How will ratemaking models respond to the changes in coverage wording that will undoubtedly appear in the future?
· How can actuaries assist in the development of viable coverages to meet new demand in the market?
· Do actuaries have any advice about communication of risk and how best to mitigate it?
For those interested in exploring and modeling data, we’ve created a GitHub repository which has scripts to pull some of the publicly available COVID-19 statistics. That may be found here: https://github.com/casact/covid_19_data.
Please consider using the comments section on this page to share your thoughts. As always, feel free to reach out to me directly at firstname.lastname@example.org if you have any ideas or questions about how the CAS can best serve its members and the public at large.