P/C Insurance Is Industry Least Likely to Default Due to Coronavirus: S&P Credit Analysis

By | April 13, 2020

Compared to others, the property/casualty insurance industry is weathering the coronavirus crisis rather well.

The property/casualty insurance is the least-impacted industry by the coronavirus pandemic, at least so far, according to an analysis from S&P Global Market Intelligence.

S&P compiled its analysis for March, generating industry medians from its Credit Analytics Probability of Default Market Signal model (PD), which uses stock price and assets volatility as inputs to calculate a 1-year probability of default.

The top 5 industries that have been the most impacted, based on market signals, are:

  1. Airlines
  2. Casinos & Gaming
  3. Leisure Facilities
  4. Auto Parts and Equipment
  5. Oil & Gas Drilling

S&P points out that there are multiple reasons the airline industry is the industry most affected by the coronavirus: mass grounding of air traffic, border closures, and shelter-in-place policies globally. These actions, S&P said, “have caused detrimental impacts on stock performance and raise concerns about the viability of some airlines.”

The industries S&P Global Intelligence says have been the least impacted from a PD perspective include:

  1. Property and Casualty Insurance
  2. Healthcare REITs
  3. Multi-line Insurance
  4. Life & Health Insurance
  5. Industrial REITs

While all five sectors scored high on the “least impacted” front, they still showed some pressures, according to S&P’s PD model.

“We continue to see market stresses and increasing unemployment rates, which we expect to elevate PDs in the coming months,” the S&P report noted.

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