Analysts at Fitch Ratings say they’re still not sure what to expect from the COVID-19 pandemic, or from the pandemic’s economic impact.
But, if the pandemic ends up being comparable to the Fitch stress test scenario, some North American life insurers could end up facing rating downgrades.
(Related: Fitch Unveils COVID-19 Test Scenario)
Julie Burke, Douglas Meyer and other Fitch analysts talked about how they see the North American life insurance sector earlier this week, at a webinar Fitch organized to update investors and others on its efforts to assess the financial services companies’ readiness for hard times.
Burke, head of North American insurance at Fitch, emphasized that predicting the effects of the COVID-19 crisis is difficult.
“The COVD-19 health crisis has brought on an unprecedented contraction, the likes of which we’ve never seen in our lifetime,” Burke said.
Fitch has tried to conduct general crisis readiness reviews, using criteria released on April. Fitch has assumed, for example, that severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), the virus that causes COVID-19, will infect about 5% of the population, send 15% of the infected people to the hospital, and kill about 1% of the infected people.