The economic uncertainty brought about by COVID-19 has impacted the U.S.insurance industry’s investment portfolios this year yet insurers cumulatively entered 2020 in a strong financial condition, according to a just-released Insurance Information Institute (Triple-I) report.“The good news is the industry is well positioned to provide the safety net we need,” said Dr.

Steven Weisbart, Chief Economist and Senior Vice President, Triple-I.“We recognize there’s been deterioration in investment income during the past few months, but the industry was financially strong before the pandemic hit.If a , most economists believe the economy will have little trouble bouncing back.

Until then, it’s just going to be a longer process than we originally thought.” The financial fortunes of the U.S.’s property/casualty (P/C) insurers are generally tied to the U.S.’s Gross Domestic Product (GDP) as auto, home, and business (e.g., construction, (w/c)) activity are reflective of the economy’s overall health.Weisbart says while a combination of government restrictions and personal fear is delaying economic recovery, the insurance industry has been able to provide some relief and flexibility for its private-passenger auto insurance policyholders.More than had been offered to the nation’s drivers in 2020 as of the end of May, a Triple-I analysis found, and insurers continue to monitor the claims experience of motorists.

The Triple-I report shows some additional positive news for insurers.For example, during the past four years the number of owner-occupied homes has risen following a decade during which there was no increase.This is significant for the P/C insurance industry because virtually every owner-occupied home has homeowners insurance while only about half of renters buy renters insurance.

Pandemic-related changes may also affect workers compensation insurance as some states consider changes to the way w/c claims are processed for front-line workers, such as those in health care and law enforcement.On the other hand, some economists suggest w/c claims may experience a decrease due to the number of people working from home.The special topic section focuses on life insurance.

Although this sector generated its largest pre-tax operating loss of any quarter in at least 18 years, deaths due to the COVID-19 virus weren’t responsible.Instead, the plunge in interest rates was so steep and is expected to last so long that the industry booked an unprecedented increase in aggregate reserves.Reserves rose to $103.5 billion—a $57 billion increase since the third quarter of 2019.

A copy of the 2Q 2020 P/C Industry is available to Triple-I members at www.iii.org.