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Economic activity contracted sharply in 2Q20,due to shutdowns measures which also sparked a slump in insurance demand. We expect a deep recession in 2020 and protracted recovery in 2021, with premium growth to remain weakened by the economic slowdown.
Key takeaways
GDP growth contracted by 11.4% yoy in 2Q20, the largest on record since 1996, as the pandemic crisis has disrupted both demand and supply
We forecast the economy to shrink by 7% this year despite enormous monetary and fiscal stimulus, and partially recover by 3.5% next year
Total insurance premiums shrank by 7.1% in the second quarter, due to declines in life and casualty business; meanwhile ceded premium increased by 32.5%
We expect the COVID-19 crisis to continue to depress insurance demand in the near term
