Insurance coverage during future pandemics or a resurgence of COVID-19 should be “much clearer”, a report from Allianz Global Corporate & Specialty (AGCS) says.

The study says that during the current pandemic, insurers have clarified wordings and informed policyholders of exclusions or the extent of cover.

“Over time, there may be a shift in policy wordings away from pandemic clauses,” Global Head of Short Term Claims Ray Hogendoorn said.

“Coverage will be much clearer in terms of what is included and excluded for infectious disease outbreaks. Dealing with claims in the next pandemic will hopefully be much more straightforward.”

The report says the coronavirus pandemic and resulting lockdowns have had a “significant impact” on commercial and specialty lines of insurance, both in terms of claims volumes and financial impact.

“The rapid spread of COVID-19 in the first half of 2020 resulted in drastic lockdowns, forcing the closure of businesses, cancellation of events and a general curtailment of economic activity around the globe,” it says.

“Estimates vary widely, but there have been reports that insurers could pay claims related to the coronavirus pandemic of around $US80 billion ($112 billion) in the US and the UK alone, comparable to the insured loss bill from hurricanes Harvey, Irma and Maria in the 2017 Atlantic hurricane season.”

Global Head of Claims Philipp Cremer says the reduction in economic activity led to subdued traditional property and casualty claims.

“However, this was outweighed by an increase in COVID-19 related claims notifications, especially in the entertainment industry with the cancellation of live events and the interruption of movie and other film productions,” he said.

“Meanwhile, there is still the potential for traditional property damage and business interruption claims to occur as factories and businesses restart, and given the longer development patterns of third-party claims.”

Click here for the full report.