Insurance market Lloyd’s of London has said thee coronavirus pandemic will cost the insurance industry over $200 billion.
Lloyd’s pays out to insurers affected by disasters. It estimated that its own payouts are now on a par with the 9/11 attacks in the United States, which were $4.7 billion, and the 2017 hurricanes, which led to combined payouts of $4.8 billion.
It also said it expects to pay between $3 billion and $4.3 billion to insurance companies to help them cope with the pandemic. Losses could widen if lockdowns continue into the next quarter, which would push the overall cost to the insurance industry to $203 billion.
“It could be two years before everyone really gets their arms around the true cost of this pandemic. We estimate that government borrowing could be as much as $10 trillion globally to protect the economy for the losses that we’ve seen”, Lloyd’s chief executive John Neal said, and added:
“What makes COVID-19 unique is not just the devastating continuing human and social impact, but also the economic shock. Taking all those factors together will challenge the industry as never before”.