BUSINESS IMPACTSOFCOVID-19ONINSURERS BUSINESSMODEL IMPACT Life/ Health P&C Technical Premium Weakeneddemandduetoeconomiccontraction,risingunemploymentandsupplychaindisruption Income Decreasein-person salesasaresultofwidespreadsocialdistancingimpactinginsuranceface-to-facedistribution Focus next Increaseindirectandonlinesalesas aresultofincreasedonline platformtraffic and useofdronesandmobiledevices slide Increasedawarenessanddemandforinnovativeproductsaround preventionandrestorationwithrespecttosystemicrisks Claims Decliningaccidentfrequencyas aresultofsocialdistancingandremoteworkforce deployment Increasedandunfavorablelitigationasaresultofpolicy wordingambiguity onexclusionsand governmentmandates/pressure Increasedlife/healthinsuranceclaimsasaresultofCOVID-19impactonhealthandmortality Investment Investment Lowinterestratesreducing future investmentincome onnewandrollingsecurities Income Income Increasedcreditspreadanddefaultsoncertainportfoliosegments(e.g.below-investment-gradefixed-incomesecurities) Decliningportfolioearningsasa resultofcostlierhedgingand postponementofstocks’dividendspayments OtherIncome Decreasedfee-basedincomeasaresultoflowervalueofAUM AssetandLiabilityPosition Lowerunrealizedcapitalgainsdrivingcapitalizationandsolvencylevelsdownas aresultofassetrevaluation Lowerrealizedcapitalgainsdriving liquiditysqueeze as aresultofaccelerated liquidationand assetrevaluation Defaultsonbelow-investment-gradefixed-incomesecuritiesimpactingcapitalpositions Lowerinflationcould resultinmorefavorableprioryearreservedevelopmentparticularlyonproperty lines Increasedreservingduetoassumptionrevisionsfor long-tail andinterest-sensitiveproducts withembedded guarantees Ineffectivehedgingleading tooverallreductioninportfoliobalance OperationalCosts Operationalconstraintsandhigherexpensesasaresultofremoteworkforce mobilizationandcrisismanagement Increaseincyberattacksanddatabreachesas aresultoflargescaleworkforce digitizationanddatademand Reductioninfixedcostsasaresultofremoteworkforceefficiencyandreductionsin-officespacerequirements Copyright © 2020 Accenture. All rightsreserved. Source: Accenture Research based on Capital IQ data, Analyst Insights, Market Research, Press