Uncertainty in the market will keep carriers on their toes throughout 2021
Written by Kevin Riley, SVP of Customer Experience
To say 2020 was a tumultuous year for the stock market and economy would be a great understatement. We all experienced the significant stock market drop at the onset of the COVID-19 outbreak and witnessed the market battle back to end the year with record highs. Job loss, furloughs, quarantine, and many other employment impacts were felt across the market. While there is much cause for optimism with the vaccines, there remains much uncertainty about how the market will perform in 2021. The timing of job recovery and reopening of businesses to their full potential will be the keys to how soon we see a full rebound. Just recently, while reading a finance page, I saw two headlines for articles one right after the other:
The insurance market should be prepared for the uncertainty to continue throughout 2021.
- Interest rates will likely remain low for the foreseeable future, which will provide some pressure on earnings.
- Covered lives and premium may experience a dip, depending upon the timing of the vaccine rollout and the ability of businesses to resume normal activities.
- We expect to see a jump in some of the diagnostic segments that have seen a decline (e.g. elective surgeries) for disability based products.
- Life insurance incidence on the working population will likely see a return to previous pre-pandemic levels as we approach the end of 2021.
Overall, we can expect the impacts to the insurance market to continue to be felt for a while longer.