Global reinsurer Swiss Re anticipated that the COVID-19 outbreak will weigh on the global life and health (L&H) insurance sector in 2020, as it expected the worldwide economy to fall into a sharp recession. It projected aggregate L&H premiums to contract by 2.9% in real terms to $4.2 trillion in 2020. It anticipated the challenging conditions to have a significant impact on the life savings segment, which accounts for more than 50% of total L&H premiums, as the need to access cash funds from savings policies rises in economic downturns. However, it expected protection-type life insurance products, as well as traditional health and medical insurance products, to be less affected and to post a positive growth rate in premiums due to rising risk-awareness among customers in response to the pandemic. Also, it projected global life (including savings and annuities) and traditional health insurance premiums to contract by 4.4% in real terms in 2020 due to the COVID-19 outbreak. However, it considered that the impact of the pandemic on the medical insurance segment is hard to quantify, and expected global medical premiums to expand by a marginal 0.4% in real terms to $1.4 trillion this year. 

Further, it expected global L&H insurance premiums to recover and to grow by a real rate of 3.2% to $4.4 trillion in 2021. It attributed the anticipated rebound to strong new sales across all segments as lockdown measures are relaxed, as well as to the expansion of online distribution and the accelerated underwriting of products to adjust to the "new norm" of digital interaction. Also, it expected that life savings products will drive the recovery of the L&H insurance sector, but that such products could be less appealing for some customers amid low interest rates. It also considered that rising health risk-awareness will support demand for health and medical insurance. In parallel, Swiss Re anticipated that direct claims related to the pandemic will increase due to higher mortality rates and medical expenses, as well as to COVID-19 testing and costly stationary care treatments, such as intensive care. However, it considered that the impact of higher claims on global L&H insurers will be manageable as mortality rates are lower among insured individuals.
Source: Swiss Re