It’s not only liability that’s drying up. Morgan Stanley said the capacity of the reinsurance market worldwide to take risk, currently around $120 billion annually of premium, will shrink significantly, perhaps by one-third or even more.”

Its report, dated September 17, said European analysts “have solvency concerns about Axa”, which has high primary life exposure in the US. It also warned about the estimates of losses being claimed by many companies, criticising the evidence and the financial calculations they are being based on, saying it is too early to make such decisions on what will be a very complex exercise.