In the wake of the Covid-19 pandemic, many people wonder how it will impact their insurance budgets and investments. The OECD has estimated that one month of strict confinement measures led to approximately USD 1.7 trillion in revenue losses. While the full extent of the virus’ impact is still unknown, there is no doubt that it will have a significant financial effect on individuals and businesses. This blog post will explore how Covid-19 could impact insurance premiums and investment strategies in the coming months and years.
Outolook towards Insurtech Investments
Due to restrictions set by the government to prevent coronavirus from spreading, many businesses have shut down or limited their services, leading to a decrease in income.
Investments have also been affected by Covid-19. Many insurers have been forced to sell off assets to raise cash. This has put downward pressure on prices and has made it more difficult for insurers to grow their businesses. In addition, many insurers have been forced to invest in less risky assets such as government bonds. This has further reduced returns and has made it more difficult for insurers to generate growth.
In times of crisis, people tend to revert to tried and true methods. We see this in the insurance industry with a renewed focus on traditional solutions such as long-term products and personal lines policies.
However, this conservative attitude towards insurtech investments is not just limited to the insurance sector. Venture capitalists (VCs) are also more selective about which startups they invest in and are looking for companies that can provide concrete solutions to pressing problems. The COVID-19 pandemic has made this abundantly clear, with many VCs now emphasizing startups that can help businesses manage risk and plan contingencies.
The bottom line is that the COVID-19 pandemic has significantly impacted insurance budgets and investment strategies. Insurance companies are increasingly focused on risk management, while VCs are looking for startups that can provide concrete solutions to the challenges posed by long-term growth.
What do you think about these changes? Do you think they are positive or negative for the industry? Let us know your thoughts in the comments below!
The article has been published by the editorial board of the Fintek Diary. Happy Reading. For more information please visit www.fintekdiary.com
