News Bites: Your Insurance Coffee Break

InsureMyTrip, the US travel insurance comparison site, said the number of policies sold for future trips hits its highest levels since March 2020.

This comes as the Transportation Security Administration also announced over 1.3 million U.S. airport passengers were screened last Friday, the highest number of passengers screened since mid-March 15, 2020.

“We still have a long way to go until travel gets back to pre-COVID-19 levels, but there are encouraging signs of a recovery underway,” says Cheryl Golden, vice president of eCommerce for InsureMyTrip. “Travel insurance is now top-of-mind for travelers. And, as the travel industry begins to rebound from a pandemic-related slump, we are doing everything we can to ensure travelers have the right travel insurance.”

The Office of Budget Responsibility has predicted a default rate of 40.4% on BBL and CBIL finance to SMEs, with £27.2billion of loans expected to be written off.  Purbeck Personal Guarantee Insurance, provider of the UK’s only Personal Guarantee Insurance to SME business owners and directors, is urging the 59% of businesses revealed to have borrowed more than 20% of their turnover, to calculate their repayments and heed the insolvency warning signs.

Purbeck has calculated that interest on the average Personal Guarantee backed CBIL loan of £766,000 could amount to £144k at 7% interest to £327k at 15% interest.

Todd Davison, MD of Purbeck Personal Guarantee Insurance said: “With some businesses seeing sales driven down by as much as 50% during the pandemic, reports suggests the number of insolvencies could potentially be even higher than at the height of the global financial crisis back in 2009.  It is critical that businesses look ahead at the loan repayments they will need to make, watch for the insolvency warning signs and seek expert advice on next steps such as turnaround finance; refinancing; Time to Pay; Company Voluntary Arrangements or Administration.”

GlobalData says the life insurance industry in Australia is projected to decline at a compound annual growth rate (CAGR) of 0.9% from AUD34.8bn (US$23.6bn) in 2020 to AUD33.3bn (US$22.7bn) in 2025, in terms of gross written premium (GWP), due to the macroeconomic challenges from the COVID-19 pandemic and structural reforms, according to GlobalData, a leading data and analytics company.GlobalData’s strategic intelligence report, ‘Australia Life Insurance: Key Trends and Opportunities to 2025’, reveals that the Australian life insurance industry, which was already battling heavy losses from the bushfire damage, continued to decline in 2020 as lockdown measures curtailed economic growth.

The Financial Services Commission (FSC) of South Korea plans to allow third-party digital platforms to sell non-life and micro-insurance as part of the country’s financial ‘sandbox’ program, says GlobalData. The move is expected to increase the e-commerce share in South Korea. The sandbox program aims to promote insurtech companies by easing regulations and encouraging innovation, says GlobalData, a leading data and analytics company.

GlobalData reveals that e-commerce channel accounted for 81.4% of life insurance premium but just 4.5% in non-life segment in 2019. On the other hand, agencies accounted for 44.3% of non-life insurance premium during the year.

Mahitha Kasireddi, Insurance Analyst at GlobalData, comments: “This is primarily due to complicated terms and risk coverage associated with non-life policies which need interaction with brokers or agents. Currently, e-commerce sale of insurance is through insurance entities only and the new regulation will allow third-party digital providers. The changes in regulation once implemented will help increase the share of e-commerce channel in the non-life segment to 7.7% in 2024.”