The economic uncertainty and high risk of unemployment is expected to adversely impact the premium earnings of Belgian insurers, according to GlobalData, a leading data and analytics company.

GlobalData forecasts both the life and the general insurance markets to decline in Gross written premium (GWP) in 2020. The life market is now expected to decline by 1.7%, while it was previously forecasted to grow by 2.0%. Similarly, GlobalData expects the general insurance market to decline by 1.6%, compared to growth of 1.5% before the pandemic.

GlobalData insurance analyst, Deblina Mitra, commented: “GlobalData’s job analytics database shows there has been a 1% decline in the number of active jobs in the insurance industry in the last 30 days. This is based on the jobs’ data tracked across 11 insurance entities in the country.”

The virus outbreak is expected to lead to partial deterioration of the insurers’ capital strength, as decline in cash flow due to economic uncertainty and low premium earnings from new policies will impact insurers’ profitability. Furthermore, higher claims demand from the prevailing policies is expected to pressurize insurers’ technical reserves.

Mitra continues: “Belgia insurers are fighting to keep customers. General insurers have relaxed renewal terms and added additional services to their customers. For instance, Fidea Assurance extended the insurance to cover vehicle theft for self-driven vehicles valuing up to €100,000 until June 2020, if the vehicle is unable to be equipped with an anti-theft device due to COVID-19. Measures like this, across a range of products, will see GWP decline in the short-term, but insurers will hope it means customers are less likely to cancel policies or switch providers.