AZ Digitals Blog

The role that the insurance industry has to play amid the COVID-19 outbreak is significantly huge. It is similar in case of natural disasters, or similar epidemic or a recession. The number of confirmed cases has passed 300K from stats all over the world. In comparison with other countries, the health risks with COVID-19 are lower in Canada. The public health agency of Canada has given this confirmation. They stated in their statement that Canada’s risks with ‘COVID-19’ are far lower than other countries including the USA.

There are huge fears and panic that relate to the virus since it started spreading and created chaos all over the world. The fears are related to the risks that are arising every day due to ‘COVID-19’.

There are fears amongst the businessmen and business communities of a complete lockdown. The insurance companies are the only financial institutions that can cover these losses. Being a highly saturated industry and financially sustainable, its role is paramount. New businesses, assets and high-profile businesses in Canada are mostly insured.

The types of insurance people normally have are health, property and business insurance for similar types of circumstances and situations. Car insurance is a must in Canada, and therefore, while at risk the life insurance is also a huge necessity. Whether its life or business insurance, the most concerning factor is the associated risk. The amount of risk associated will automatically have an effect on the insurance value and vice-versa.

Furthermore, in case of a lockdown or a dry period in business. Insurance is claimable in drastic scenarios as most businesses are insured. Businesses, especially new, needs a cover to combat unpredictable scenarios. To get out of an extreme situation the recovery time is an essential element. The situations include natural disasters, epidemics, and pandemic.

HOW INSURANCE COMPANIES WORK

Re-insurers are huge companies that insure insurance groups. These are mega financial institutions that are there to cover the losses made by the insurance companies.

Most companies can’t predict natural disasters, calamities and situations like Pandemics and related epidemics. Hence, they can have a tendency to take huge losses. An example of a Re-insurer company is Munich-Re, as it is a huge company that insures the insurance companies globally. These companies handle risks that are too large for companies to handle. These risks include political turmoil, disasters, pandemics, natural disasters, and political conflicts. The reinsurers also make it possible for the primary insurers to keep less capital on hand so that they can cover the potential losses.

The losses are on a global scale being unbearable and unpredictable. COVID-19 is a pandemic that is a cause of many deaths and financial losses. The Re-insurers from the insurance industry is deeply monitoring and controlling the financial losses in the current scenario.

As an example, we can assume that Munich-Re is the re-insurer for the insurance group called Aviva. In order to avoid bankruptcy and financial losses. One of the largest re-insurers, Munich-Re will cover the Aviva group. This is in similar crisis situations like COVID-19. To be exact it’s like claiming their own cover while the insurance companies incurred losses in business activities.

THE FEAR FACTOR – CANCELLATION OF EVENTS

The long term effects of the disease and its effects on people are linked with the fear factor of what’s related to the impacts. The insurers and the business community should have a fear of the long-term effects and impacts of such a pandemic that has caused huge deaths worldwide.

The summer Olympics of Tokyo can be taken as an example. A huge event taking place in Tokyo Japan, with mega investments as well as the involvement of so many countries. In short, it is one of the mega sports events, similar in stature to a football World Cup, as the viewership and audience are mammoth. The fear factor is the cancellation of the Summer Olympics. Meaning the involvement of the insurance industry and further according to the size of the event the re-insurance companies as well. The involvement of re-insurance companies is not direct but is always impactful to make situations stable.

WORLD TRAVEL & TOURISM INDUSTRY

Other such examples are the Travel and Tourism industry that alone in Europe gives a huge amount of profits to the governments. Italy alone was a major hub of travel and tourism in Europe with places like Rome, Milan, Venice, and Capri being tourism spots for the whole world. The country has suffered huge losses in terms of its tourism industry coming to a halt. Travel insurance is yet another insurance sector that has suffered due to cancellations of flights, buses and road trips due to ‘COVID-19’. Hence, the travel and health insurance i.e. medical insurance are the two most famous insurances linked with the tourism sector. The losses have been bilateral if we think with a financial perspective.

Ironically, the role of the insurance industry, in any case, has been to bring stability to drastic situations and extreme circumstances.

Coronavirus, a global pandemic has emerged as a major threat especially hurting the global economy, finance and trade. Originated from China’s Hubei province, Wuhan city. It originated and spread everywhere from an animal market in Wuhan. The pandemic has seen many deaths, especially, in the USA, Canada, Italy, Spain, China, France, U.K., and Hong Kong. Known by its medical name as ‘COVID-19’ as it spreads across China to the rest of the world.

The reactions of the global financial markets came late, not until two weeks before. It was when the virus started spreading across the middle east including Iran and most countries of Europe.

MOST AFFECTED COUNTRIES WITH ‘COVID-19’

The most suffered country to date is Italy. However, Spain, UK, Germany, and France have also suffered in terms of deaths and the economy. The COVID-19 risks have raised many eyebrows with fears that there could be recessions on the global economy. Something similar to what came in 2009, 11 years from today and it affected most continents. However, if we talk with respect to investments, the country risks have fluctuated and varied because of coronavirus. There have been huge variances in the European continent. Italy is suffering the most with a complete lockdown for weeks resulting in a downward graph in Total GDP. The forecasts for GDP have been dubious. This is especially true for many affected countries especially the ones in the top 10 Total GDP list.

Hence, there are confusions over how effective are the containment efforts. The immense losses have also proved that recovery will not arrive soon. Significant negative change overreactions of consumers and pricing strategies, as prices have increased in most industries.

The COVID-19 economical impacts can’t be predictable in a short period of time. Economists all over the world are of the opinion that it should take at least 4-5 months for recovery. This is only applicable if the virus gets under control soon. However, if the situation gets worse. Hence, the recovery process time from coronavirus might increase. This is highly dependent on the scenario, circumstances, and total time frame.

THE MOST RECENT STATS RELATED TO ‘COVID-19’

According to the most recent statistics, COVID-19 or Coronavirus has been reported with 386,962 cases from the whole world. This includes 16,751 deaths reported and 102,404 recovered. The most suffered country to date in Italy with 6,077 deaths. This is followed by China 3,277 deaths & Spain 2,318 deaths. However, the USA has been on a lower side with 582 deaths, Iran 1,934 deaths. The European countries France, 860 deaths and U.K. 335 deaths are lesser affected.

RESPONSE OF THE MARKETS

The market responses have never been uniform globally. However, the facts and financial analysis have shown that they are on the pathway of recession. What’s The Pathway of Recession? It means that markets will be seeing a global recession soon. This is something similar that caused the global economy to downfall some 11 years from today. Major continents that were affected earlier with recession were North America, South America. It also includes Europe and parts of Asia that includes Central Asia. Hence, the mechanical models of recession risks have ticked on the higher side. This means that the world is not undergoing a recession currently. However, there are a tendency i.e. risks associated with recession due to coronavirus.

‘Recession’, is an economic situation or a business cycle contraction. It arises due to some economic conditions causing a general decline in economic activity. These conditions can be for e.g. War, Political Turmoil, Pandemic, or a financial crisis situation.

While we discuss the valuation of the risk assets, similar responses may vary due to the COVID-19 impacts. However, something positive is that credit markets not getting highly affected. This means, don’t foresee funding and financing problems. In addition to this neither there are any job crisis situations arising due to ‘COVID-19’. Most people are allowed to work from home especially in case of a lockdown.

WHAT’S A COVID-19-INDUCED RECESSION?

While we discuss recessions more closely and finding out why they arise, and how they impact the global economy. We need to discuss the various types of recessions in detail.

Real Recession

The real recession is a financial situation that relates to the Economic recession of 2009. It affected most countries in Europe, Canada, the USA, Mexico and some parts of Asia. Falls into the category which is the CapEx boom cycle. It derails the economic expansion causing disruptions, shutdowns, and variances in pricing. Hence, also affecting the stock markets and financial institutions that include banks and building societies. Arises due to conditions such as wars, disasters or other disruptions that can push the economy into contraction.

COVID-19 can’t cause a real recession according to most economists as the tendency is more to infect the host country and some other countries. However, there shall be some losses that relate to trade, finance, travel, and education. The losses from coronavirus might increase as well depending on the recovery time.

Policy Recession

The policy recession happens due to the central banks leaving the rates too high as compared with neutral rates. This results in tight financial conditions and credit intermediation.

Financial Crisis

A financial situation that creates imbalances and brings a country performances down in terms of financial growth and economic growth.

COVID-19 can’t be seen as something contributing to financial imbalances. However, financial stress could arise due to strains in cash flows. This is particularly likely to happen in SMEs and Medium enterprises. Larger companies are less likely to get affected because of many reasons. They are far more prepared to handle financial crisis situations and economic meltdowns as compared to smaller companies.

THE ROLE OF LEADERS IN CURRENT GLOBAL SITUATION

The role of global leaders in the current situation that relates to COVID-19 is significantly huge. Especially the leadership of China, the USA, Canada, Germany, and Italy. Leadership’s role is vital under areas that relate to decision making. It also includes making health policies regarding coronavirus and creating practical awareness. Hence, in their countries in supervision with the World Health Organization, they must make sure for people’s safety. Leaders shouldn’t become dependent on projections as the financial markets are experiencing great uncertainty. The leadership must plan the best and prepare for the worst-case scenarios in terms of cost and consequences.

In such a scenario that relates to risks and crisis. The leaders must analyze and address the challenges associated. These challenges are economic, social and national level challenges. They must also play an active role in determining the impacts of the COVID-19 virus, and its recovery process. Furthermore, how long the impacts will take place in their countries.

Top 10 most searched celebrities on Google is the survey of the Top 10 most searched celebrities. It is according to stats from all over the world. It’s a tribute to the Top 10 most famous celebs on the World Wide Web. The list is not based on popularity results, it relies more on internet search ratings.

People who follow their stars all around the world use personality search most often. They like keeping track of their likes, dislikes and what are they up to most recently. However, the concentration of the most famous & searched personalities go to the United States. It is mainly due to Hollywood, and their active participation in sports like American Football and Basketball.

TOP 10 CELEBRITIES LISTINGS– RESULTS BASED ON GOOGLE SEARCHES FOR 2019

1. Antonio Brown (US)
2. Neymar (Brazil)
3. James Charles (US)
4. Jussie Smollet (US)
5. Kevin Hart (US)
6. Billie Eilish (US)
7. Greta Thunberg (Swedish)
8. Kelly (US)
9. Pheonix (US)
10. Jordyn Woods (US)

1. ANTONIO BROWN (UNITED STATES)

Professional American football player who has seen many ups and downs. The career has been full of hassles and challenges but Antonio has always tried to focus on his career. He has always been on his role in the American team with speed and agility.

The highest-paid receiver and also ranked the 31^st highest-paid athlete by Forbes in 2019.  A wide receiver and also a professional football player, the father of Antonio Brown. He used to play for Albany/Indiana Firebirds.

2. NEYMAR (BRAZIL)

Brazillian by birth, who was born in 1992 in Brazil. He has represented Brazil in two World-cups i.e. Brazil 2014 and Russia 2018. In 2011 and 2012, he raised to more heights. His consistency was for both consecutive years 2011 and 2012 as a footballer of the year. The Brazilian has scored 61 goals in 100 appearances for Brazil. Neymar also plays for French club Paris Saint Germain on his regular position as a forward. He is one of the most talented and valuable players in the world. In 2019, Forbes ranked Neymar as the World’s third highest-paid athlete. With earnings of $105 million. He is after Cristiano Ronaldo and Lionel Messi, the most valuable footballer and also most searched on Google.

3. James Charles (UNITED STATES)

Famous internet personality who is a You-tuber, a makeup artist and an internet celebrity. He has risen to fame lately and is a Gay. James has carried his internet presence and personality as a successful You-tuber. One of the few internet personalities in the world who have risen to fame in a short while. He holds immense success on the internet due to unique style and makeup sense.

4. Jussie Smollet (United States)

American actor and singer initially began his career as a child actor in 1987. He is well known for the albums Sum of My Music, Empire: Music from ‘True Lover Never’.  Some of his prominent films are Alien: Covenant, Marshall, and Born to Race: Fast Track and The Skinny.

5. Kevin Hart (United States)

American actor and comedian born in Philadelphia, USA. A versatile actor who is active in films, T.V. and Standup comedy since 2001.  Worked in films like Jumanji: The Next level & Jumanji: Welcome to the Jungle. In addition to this includes Ride Along and Ride Along 2. It also includes many other films including Scary Movie 4 and The Last Stand. A comedian and actor who has proved through his diverse roles. He has proved that acting is truly an art that requires passion and determination.

Kevin Hart’s role in Central Intelligence along with The Rock got huge appreciation all over the world. He has won many awards and accolades. Some of the most distinguished awards are People’s Choice Awards, MTV Movie Awards, and BET awards. Kevin Hart is highly gifted with acting skills of the highest caliber & possess diversity in acting talent. A celebrity that holds the position of ‘Number 5’ on the Top 10 Google most searched personalities for the year 2019.

6. Billie Eilish (United States)

Birthplace LA, California, this American singer, and songwriter born on 18^th Dec 2001. She has won 34 awards and 88 nominations in various awards. The most prominent being Apple Music awards, American Music Awards, Guinness World Records and MTV video music awards. Being a successful singer and songwriter who has worked on many songs and Albums. A personality that holds the position of ‘Number 6’ on the Top 10 Google most searched personalities for the year 2019.

7. Greta Thunberg (Sweden)

Born in Stockholm, Sweden on 3^rd January 2003. Her mother is an opera singer and her father was an actor. Greta was diagnosed with a syndrome in her youth known commonly as OCD.  At a very young age i.e. 8 years when she first learned about climate change in the year 2011. While she was sensitive she couldn’t find out why so little has been done for climate change. She went on to challenge her own family in order to reduce the carbon footprints. Her efforts outlaid an overall impact on the environment. Thunberg adopted a vegan lifestyle and preferred vegetable foods. As she was very particular from a young age for waste recycling and upcycling of household waste. Blessed with special powers and a thinking mind. She said that “Being different is a gift from the Almighty.”

Nominated in 2019 for the Nobel Peace Prize. Also, made an address at the UN Action Summit held in September 2019.

It was very little that her peers and those who were with her always knew. They were less knowledgeable that she was about to become an icon. She became an icon of climate change activism and started a global movement “School Strike for the climate”. She is deservingly on the list of ‘Top 10’ most searched personalities on Google number 7. Also known for her iconic role in efforts for climate change and creating awareness globally.

8. R.Kelly (United States)

R.Kelly is an American singer, songwriter and record producer from The United States. He was born on 8th January 1967 in Chicago, Illinois. Kelly was arrested, it happened because of some controversies last year in 2019. It was for several acts of social crimes, including child pornography and sexual assault of multiple counted.

He is also known as the Pied Piper of R&B and known for his unique songs and lyrics. He is on the list of most Google searched celebs for 2019 number 8.

9. J.Phoenix (United States)

J.Phoenix is an American actor who works for Hollywood. Phoenix was born in San Juan, Puerto Rico on 28^th Oct 1974. Received several accolades for his various performances. These performances awards are a Grammy award, a Golden Globe award and three nominations for Academy Awards. Some of his most prominent films are Ladder 49, Buffalo Soldiers, and Joker and Walk the line. An actor of great style and an understanding of acting and art. He is on ‘number 9’on the list of Top 10 most searched personalities on Google.

10. Jordyn Woods (UNITED STATES)

Famous model from the US, Born in Los Angeles California on 23^rd September 1997. She has modeled for many campaigns that include Khloe’s Good American Line. Mother of Miss Wood and owner of Woods Management Group, she is currently under her management. Holds a close relationship with Will Smith whom she calls often as Uncle Will. She is on ‘number 10’on the list of Top 10 most searched personalities on Google

Read the related blog: CORONAVIRUS – MEDICAL SYMPTOMS AND HOW IT ORIGINATED?