Reinsurers Face Greater Risk In Corona Virus Outbreak Than Insurers – AM Best

The current corona virus outbreak in China will not impact much on underwriters in terms of claims pay-out says AM Best.

The rating agency notes that reinsurers typically have higher exposures to mortality and morbidity risks and may have as much as 40% or more of required capital held for these risks before diversification.

Over the years, in an effort to minimize the concentration of these kind of risks, global reinsurers have been broadening their risk exposures to include financial solutions, asset management solutions and other annuity risk arrangements.

It is believed however that P&C insurers may suffer some losses due to business interruption, event cancellations and travel related covers, but these losses will be manageable for them.

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