The Insurety alliance generated lower revenue in the first half of 2020 than in the same period in 2019. This was mainly as a result of reduced economic activity and the need to reduce exposure.
Risk mitigation strategies have generally been positive, with a significant reduction of claims in Q2 2020 when compared to Q2 2019.
Whilst there appears not to have been a significant increase in claim activity arising from the pandemic, our sense is that these will come as countries slip into recession.
Lombard Guarantee continues to be the largest revenue contributor to the alliance but the contributions from Assetinsure and Nordic Guarantee are increasing.
South Africa continues to be the largest generator exposure for the alliance. Over 50% of the exposure at the end of June 2020 was based in the African continent.
Nordic Guarantee’s claims were around 50% lower than expected during the difficult period affected by COVID-19. There was an expectation that the travel portfolio would be heavily impacted. This has not as yet materialised, primarily as a result of protection to guarantee providers as a result of EU regulations.
Assetinsure received a call on a guarantee for approximately AUD 1 million for a residential unit project. However, the team had a high certainty of recovery and the company was trading and solvent. The claim has been fully recovered.
The most significant development at Lombard Guarantee was the very significant recovery made from a claim paid in respect of Group 5. It was the largest claim ever suffered by Lombard Guarantee and some further detail on this is provided later on in this note.
After a good start of the year for some segments, in the second quarter of 2020, all products generated lower revenue than during the same period of 2019.