Panic, whether premature or not, has certainly set-in here in California. My wife and I attempted to do our grocery shopping the other night to pick up some household essentials for the week, and I was flabbergasted at what I witnessed. I had heard rumors from friends and others in the office about bare shelves and long lines, but I didn’t comprehend the extent of the situation until I saw it with my own eyes.
We visited three national chain stores and found paper good aisles bare, canned good aisles bare, frozen food aisles bare and cleaning supply aisles bare. Check-out lines wove through the store interiors. Mass hysteria for toilet paper has hit our city of Valencia, and no one really knows how long it will last. We also received word on Friday of the first confirmed case of Coronavirus at our local hospital followed by two more over the weekend.
This deadly pandemic of the novel COVID-19 virus, which initially gained hold in Wuhan, China, has spread at an alarming rate, and is now in our own backyard. It is not just some international news story unfolding in a far off exotic locale. It is here folks, and for the immediate time being, we all must remain vigilant and take every necessary precaution to stay healthy.
As evident with the volatility demonstrated by the stock market last week, the outbreak of this disease is having far-reaching economic effects. Early financial outlook models indicate an inevitable global recession because of this bug. Industries like sports and entertainment are completely shutting down, and travel and tourism will likely see enormous losses over the next 12 months or more.
Insurance markets around the world will definitely be affected – possibly to unprecedented levels. Event cancellation and contingency insurance sectors are already expecting huge setbacks in 2020 which could translate to further hardening of U.S. and international insurance markets.
We are already seeing the effects of the outbreak in the specialty and Surplus Lines markets. Travel and short-term medical insurance policies now require an exclusion for Coronavirus. The same goes for Failure to Survive products across the industry. Disability and accidental death policies remain unchanged at this time.
As resilient Americans, we must not let what is happening out there get the better of us. We must stay calm, take extra precautions and trust the authorities and each other to get through all of this safely.
Don’t hesitate to reach out to us if you have any questions about your clients’ Petersen International/Lloyd’s of London insurance policies.