Swiss Re believes total insurance premium levels will return to pre-pandemic levels in 2021, and that the market is well-capitalised enough to manage the spike in losses related to COVID-19.

Jerome Jean Haegeli, group chief economist at Swiss Re, said: “The insurance industry is showing resilience in face of the COVID-19-led economic downturn. The magnitude of premium losses will be similar to that seen during the global financial crisis in 2008-09, even though this year's economic contraction of around 4% will be much more severe. Unlike for the global economy, we expect a strong V-shaped recovery in insurance premiums, a remarkable showing considering that the world is currently in the throes of the deepest recession ever.”

Uncertainty remains over the total claims bill for COVID-19, and Swiss Re said the mid-point of the range of current estimates from various external and public sources was around £44bn.

Haegeli added: “The industry's capital position means it should be able to handle the COVID-19 shock. The upper end of the range of total property and casualty claims estimates by most external insurance analysis is £79bn, similar in scale to losses caused by Hurricanes Harvey, Irma and Maria in 2017, which the industry also absorbed.”

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