IMPACT OF COVID-19 ON INSURANCE COMPANIES

Several regional and industry-based countermeasures have been and are still being implemented by politicians to control the spread of COVID-19, the pandemic that is projected to force the European economy into a recession. The COVID-19 crisis once again calls for solidarity and cooperation within the European Union. The European recovery program aims to stabilize the common currency and market volatility: moreover, an aid package in the form of grants has been established for the most gravely affected countries to prevent them from amassing additional debt. The forecasts for the insurance market are more complex due to the uncertainty caused by the spread of the Covid. It is not possible to accurately determine the implications that it may have in the medium to long term on insurance sector and on its trend due to the uncertainty regarding the duration of this phenomenon, its impacts on the national and international economy and the possible mitigating measures adopted by government and supervisory authorities. Also in macroeconomic terms, the onset of the global health crisis, the consequent adoption of exceptional contagion containment measures and the high uncertainty about the timing and effectiveness of the measures to control the spread of the virus have subverted the global economic forecast scenarios for the years 2020-2021, making the construction of an accurate forecast economic scenario very complex. The COVID-19 emergency has had strong impacts in terms of regulatory interventions in support of the insurance sector and the companies today are facing important changes in terms of financial information, products and operations. Reinsurance represents a new challenge for companies, which are calledupon to change the paradigm in the measurement of reinsurance contracts, moving from risk mitigation and capital optimization from a Solvency II perspective to the complexities introduced by IFRS 17.