Aftershock: COVID-19 Pandemic’s Impact on Small Commercial Insurance Premium

Insurance carriers’ potential small commercial insurance premium loss ranges from US$4.9 billion to US$19.5 billion.

Boston, July 22, 2020 –Beginning in March, 2020, a range of government-imposed lockdowns and stay-in-place orders effectively brought the U.S. economy to a grinding halt, and even with government backstops in place, many small businesses are not likely to survive several months without revenue. Closures of these small businesses could have a significant impact on carriers’ annual written premium intake, which could prove problematic for carriers with a heavy presence in the small commercial insurance market.

This report estimates the impact of small-business closures and the resulting loss of small commercial premium in the United States. While it shows premium for the industry as a whole, it also drills down into specific industry classes that are likely to experience more turmoil than others. Premium loss calculations are based on data from the U.S. Census Bureau and North American Industry Classification System (NAICS), nonbindable quotes received from small-business insurance aggregator websites, and the author’s knowledge of small commercial insurance.

This 50-page Impact Report contains 37 figures and 12 tables. Clients of Aite Group’s P&C Insurance service can download this report, the corresponding charts, and the Executive Impact Deck.

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