23 Apr 2020
Posted in Coronavirus
Swiss insurers face rise in private healthcare claims as total market set to grow at 2.1% CAGR to 2023, says GlobalData
The total Swiss insurance market is set to grow at a compound annual growth rate (CAGR) of 2.1% between 2020 and 2023 from £52.0bn in 2020 to, according to £54.3bn in 2023, according to GlobalData, a leading data and analytics company.
GlobalData’s latest report, ‘Coronavirus (COVID-19) Sector Impact: Insurance – Switzerland’, reveals that the CAGR has fallen to 0.1% for the period due to the severe impact of COVID-19 across a range of product lines including holiday, healthcare and transport related insurance. All those suffering from the disease will also be entitled to exemption from contributing to their pension plans.
As the country’s tourism industry grinds to a halt amid the pandemic lockdown measures imposed by the Swiss Government hotel bookings have declined sharply; 69% in March, 90% in April, and 73% in May according to a survey of hotel owners by the Haute Ecole du Valais. This will lead to a decline in insurance spend from businesses, who will no longer need lines such as public liability. The travel and motor markets will also be hit while the country is locked down.
On private healthcare plans the Swiss insurance industry is expected to see losses across the board as all policy claims with start dates prior to World Health Organization (WHO) declaring the pandemic will be valid.
Deblina Mitra, Insurance Analyst at GlobalData, comments: “Unlike other countries, if no pandemic exclusion is written into the policies, then Swiss insurers have to pay-out. Given the mandatory status of private health insurance, the cost of COVID-19 tests and all prescribed treatment and hospitalization charges will be covered under the basic healthcare plan.”
Whilst healthcare insurance policies written since the outbreak will not cover COVID-19-related treatments GlobalData expects the industry to introduce sharp increases in premiums next year to make up for the overall expected losses.
In the transport sector loss or damage to goods due to COVID-19 is typically covered under transportation insurance, however, standard insurance does not cover loss due to delay’s caused by COVID-19 shutdowns.