Literature review of effects of COVID-19 on insurance

Abstract

This work presents an extensive literature study on COVID-19 and its effects on insurance. COVID- 19 stans for coronavirus disease that emerged in 2019. The disease, which was described as pandemic, has contributed to severe disruptions particularly on the insurance sectors specially on health, businesses and motor insurances. This report found out that the health sector in the UK suffers the most among other sectors with total death cases of around 46,706 cases. The study also demonstrates how NHS and health insurance companies are now collaborating together to minimise the side effect of COVID-19 pandemic. For instance, Bupa insurance provides an NHS cash benefit of £50 for each night with a maximum number of 35 nights. Exeter insurance company increased its NHS cash benefit from £250 to £500 per night for its customers who tested positive of the virus. In business, this study provides a solid evidence of major contributions by the UK government to help support small businesses. To illustrated, small businesses were supported with an access to a loan that is called Coronavirus Business Interruption Loan Scheme which can finance your assets and your overdrafts up to £5million for maximum 6 years. The government will also cover any business interruption expenses for the first 12 months of the interest payments and any other lenders fees expenses to maximise the total earnings of the small projects and compensate the business owners against any losses. In car insurance, the study investigated that the cost of the car insurance has fallen by approximately 1.4 percent during the first three months of this pandemic. Admiral Group insurance company, for example, was the first to declare a maximum of £50 refund to all of its insured vehicles. Although these efforts have been praised by many sectors, the investigation in this study shows that the insurance companies will spend approximately $ 203 billion due to COVID-19. Global losses are estimated at around $ 107 billion in indemnities and $ 96 billion in losses on investment portfolios, with the exception of life insurance policies.