Disaster response practices need to be rethought in light of COVID-19 social distancing measures, Fitch Ratings has warned.
Noting the challenges the industry currently faces around COVID-19, Fitch said: “The continuation of the coronavirus pandemic into hurricane season is likely to compound these challenges if a major event occurs in 2020.”
Christopher Grimes, director at Fitch Ratings, noted that social distancing measures will complicate the usual disaster response measures. "Typical disaster response practices to prevent injuries and losses from an oncoming storm, including evacuation and mass sheltering plans will need to be re-evaluated in light of public health concerns," he said.
Fitch noted there is broad consensus that current environmental conditions will likely lead to above-average hurricane activity. One isolated large hurricane could have a significant effect on industry capital, it warned.
Fitch currently has a negative sector outlook on the P/C and global reinsurance sectors, reflecting coronavirus uncertainty and near-term market conditions and profitability challenges. However, it stressed the industry remains well capitalised, providing most individual re/insurers with the ability to absorb large insured losses in the near term.
Pricing remains favorable on US hurricane-exposed primary property business, reflecting heightened loss activity in recent years, Fitch said.
Fitch Ratings, Christopher Grimes, Hurricane, COVID-19