When will this end? The impact of COVID-19 on U.S. commercial linesBy Eric Price-Glynn | May 29, 2020
The COVID-19 pandemic has cut a path of destruction through civic and economic life across the world. For U.S. commercial insurers, the pandemic’s economic devastation has turned what was expected to be a growth year for premiums into a severely challenging market, to put it mildly.
According to a new forecast from ISO MarketStance, over 1.1 million business insurance customers will fail in 2020 alone, eliminating commercial lines premiums along the way.
The ISO MarketStance forecast provides detailed data on which industries may experience the greatest impact to direct written premiums, how account size factors into forecasted premium declines and how the economic environment, and a potential recovery, may evolve in 2021 and beyond.
Unemployment near Great Depression levels
With at least 40 million Americans filing for unemployment at the end of May1, ISO MarketStance expects 2020 job losses at a scale only modestly below the annual pace of losses suffered during the Great Depression, as the consensus forecast weakens. Employment could remain depressed from 2019 levels through 2022 or even 2023, according to ISO MarketStance projections.
These job losses and related business closures will put incredible pressure on commercial lines premiums through 2020. The ISO MarketStance report sheds light on projected premium through 2022.
Taking the temperature of a viral economy
The course of any economic recovery will likely track progress in stifling the spread of COVID-19. The rapid development and deployment of an effective vaccine and/or treatments may result in a quicker-than-expected economic recovery. On the other hand, one or more further waves of infections coinciding with the 2020/21 flu season may hinder the recovery.
In light of this fluid situation, there will be periodic updates to the forecast to reflect updated data. ISO MarketStance customers will also receive access to a new, monthly premium forecast with detailed economic data to aid in strategic planning.
- Maurie Backman, “More Than 40 Million Americans Have Filed for Unemployment During COVID-19,” Nasdaq, May 29, 2020,
< https://www.nasdaq.com/articles/more-than-40-million-americans-have-filed-for-unemployment-during-covid-19-2020-05-29 >, accessed on May 29, 2020.
Tagged with: ,