COVID-19 has sparked new debates about how insurance losses are identified, categorized, defined and potentially aggregated. This is especially true in the reinsurance context. While in the US, insurance claims for losses sustained under business income and extra expense provisions of commercial property policies have largely been denied leaving little to cede to reinsurers, that is not the case under other lines of business including event cancellation and travel insurance coverages. Moreover, in the United Kingdom and in the EU, business interruption claims have been allowed under certain policy forms, which has led to reinsurance cessions.
My colleague Curtis Leitner asked me to co-author an article with him discussing the possibility of aggregating COVID-19 losses using follow-the-fortunes and related principles. I gladly admit that Curtis did the heavy lifting on this one from an analytical point of view. We published the article in the ARIAS Quarterly, Q1 2022. We hope you enjoy the article.