19 Jun 2020
Posted in Insurance
Zurich faces increased claims as premiums concentrated in impacted areas and products, says GlobalData
With the COVID-19 cases rising and Zurich Insurance Group (Zurich) high exposure to Europe, the numbers of COVID-19-related insurance claims have spiked. However, its digital capability has kept it still very effective as per the business plan, says GlobalData, a leading data and analytics company.
GlobalData’s Covid-19 Company Impact: Zurich Insurance Groupreport suggests that COVID-19 will put a large proportion of its business at risk, due to the scale of the pandemic. Its general outlook has worsened as it has a strong presence in Europe (which accounted for 60% of Zurich mj’s revenue in 2018), which has been heavily affected. GlobalData shows that Zurich’s two biggest markets, by premium contribution, are the two worst affected countries, in the US and UK.
Deblina Mitra, Insurance Analyst at GlobalData, comments: “Zurich’s business is concentrated in Europe, the region worst affected by the pandemic. Subdued economic growth will impact demand for its policies. Also, the insurer’s exposure to life insurance business makes it prone to the expected rise in claims, as well as capital market volatility. In non-life insurance business, the focus will be mostly on claims related to key lines, such as business interruption.”
However, GlobalData has also found that Zurich’s strong customer support and leverage of technology has enabled the company to deal with the pandemic effectively.
Mitra concludes: “Zurich has a multi-channel distribution strategy, offering products through both traditional modes and online channels. It has focused on the digital mode through online sales and mobile apps. It has also entered into partnerships with insurtech startups to enhance these digital offerings. The company launched a ‘Coronavirus Research Hub’ in April 2020, which provided support on supply chain and cyber risk challenges to customers.”