The coronavirus crisis could result in general insurance losses of up to $80bn (£64bn) across key classes in the UK and US, new research by Willis Towers Watson (WTW) has suggested.

The forecasts relate to business interruption, contingency, directors and officers, employment practices liability, general liability, mortgage, trade credit and surety and workers' compensation claims.
In an “optimistic” scenario where the UK and US return to a “pre-COVID-19” state following three months of social distancing, WTW said that it expects insurance losses of around $11bn.
A “moderate” scenario with six months of social distancing could result in losses of $32bn, while a “severe” scenario involving a health impact similar to the 1918 flu pandemic would lead to $80bn in losses.
“It appears that the industry-wide level of general insurance loss could exceed that resulting from the 2001 World Trade Centre event,” said WTW Insurance Consulting and Technology global leader Alice Underwood.
“Given the potential scale and systemic nature of pandemic loss, discussions about the need for some sort of government backstop to address future pandemic risk have already begun.”
The researchers highlighted how the UK insurance industry has started talks with Pool Re – the government-backed terrorism reinsurance company – to provide pandemic cover.
Similarly, the French government has set up a working group to investigate how insurance for black swan events can be provided in the future.
WTW also looked at the impact of COVID-19 on motor insurers as social distancing reduces the number of insurance claims and payouts.
Based on its moderate scenario, the company forecasts a potential drop in US personal auto losses of $40bn relative to expectations going into 2020.
“However, premium rebates given by auto insurers already may exceed $10bn and could continue to grow,” said WTW senior director Christopher Bozman.
“The ultimate extent of rebates is highly uncertain and will depend on insurers’ reactions to emerging data related to frequency reductions.”