COVID-19 has exposed limitations in the ability of the insurance industry to offer cover, analytics firm GlobalData says.

It says insurers will come under pressure to provide protection against pandemics in future Business Interruption products. It says many firms have been left feeling “aggrieved” that they are exposed to cover the cost of COVID-19 losses themselves.

“There will undoubtedly be calls for this to change, but the industry will not be able to offer the necessary cover as it would not be financially viable,” GlobalData’s Senior Insurance Analyst Daniel Pearce says.

The associated cost of claims will “far exceed any provider’s means” should a global pandemic occur again in the future, he says.

The coronavirus crisis has also laid out insurers’ exposure to the volatility of financial markets.

US life insurers are particularly vulnerable to an economic downturn as almost 75% of their investments are in corporate bonds, which Mr Pearce says are most likely to suffer during a recession as some businesses are likely to default on payments.