Coronavirus and the Recession of 2020—What It Means for Workers Compensation
Robert Hartwig, PhD, CPCU, Clinical Associate Professor of Finance,
Darla Moore School of Business, University of South Carolina
One of the insurance industry’s leading experts, Bob Hartwig, has studied insurance markets for decades, but said the COVID-19 outbreak has led to an economic pandemic with unprecedented challenges.
The economy and labor markets have endured whiplash, shifting from sustained growth to sharp decline in a matter of weeks. Several industries have been particularly hard hit, including:
Hartwig explains this economic upheaval has significant implications for the entire property/casualty insurance industry with workers compensation at the top of the list.
- COVID-19 is leading to the fastest and deepest contraction in the US economy, labor force, and payrolls since the Great Depression.
- This will make it a challenging time for the workers compensation industry as premiums drop and questions about coverage emerge.
- Legal and regulatory uncertainties are compounding the issues confronted by insurers.
- The economy, labor markets, and workers compensation payroll exposures should begin a rebound in the second half of 2020.