Oliver Baete said such events could not be insured with normal policy wordings
Allianz group chief executive Oliver Baete has compared the impact of the coronavirus pandemic to that of a meteorite hitting the insurance industry.
Speaking to Bloomberg Television, Baete said the outbreak will lead to massive losses, and any recovery will take longer than predicted.
“The coronavirus has hit our industry like a meteorite impact. There will be huge losses for the industry coming, it just takes a while for those to materialise,” he said.
Baete said ”there were certain covers, such as terrorism events or nuclear power plants blowing up, that cannot be inured with normal policy wordings where you need an industry solution or public-private partnership”.
”We need to look across a number of sectors and and ask ’how can we better cover the needs of society when you have a systematic effect’ ”?
”Systemic risk is not something that the insurance industry can insure”, Baete added.
If every year instead of one in ten cars having an accident, every car had an accident, motor insurance would become uninsurable, he said.