Thursday, December 9, 2021

Covid Assistance takes a toll on the insurance industry

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“For more than a month now, Covid has been showing great support and generosity to his family and business,” he said. “Several banks have granted mortgage leave or allowed more generous payment terms in the contemporary sense and helped families keep their heads above water.

“More than that, there has been enough generosity towards businesses to spend extremely difficult time towards the ability of payers to pay, for example, when many of these businesses have not even been able to open for significant periods.”

At the height of Kovid this year, more than half of the country’s population was in lockdown. He said this has affected a large number of families and businesses, especially SMEs.

“To his credit, the financial and insurance service industries, along with the Australian Taxation Office, have adopted appropriate policies to help people in difficult times,” he said. “But it can’t last forever. At some point, that relaxation is about to end – hopefully in a measured way instead of turning off the switch.

“We must acknowledge that, at some point, this more favorable situation that businesses and families have been able to manage under 2021 is coming to an end and this is going to put pressure on the industry.”

According to APRA, Temporary loans were suspended in August of this year, especially in NSW and Victoria’s lockdown-affected areas. While the value of loans in default was $ 11.9 billion, it represented only 0.5% of the total value of loans, which was significantly lower than the 10% peak recorded in the middle of last year.

Read more: Marsh called for a public-private epidemic risk in the United States

Despite the strong demand for online delivery during the lockdown, the transportation, postal and warehousing industry ranks third with 10.7% payment arrears, 12.4% behind construction and 11.1% for housing, food and beverages.

Dell said Covid’s massive impact was detrimental to the supply chain, which in part explained why the industry suffered high levels of arrears despite the popularity of online shopping.

“These delays cost the industry money,” he said. “But I think the main thing is that, despite the fact that we have seen this really large amount of trade through home delivery, it does not compensate for the level of lockdown that we have seen across the country that countries rely on warehousing, which requires distribution between them. ”

Since unnecessary retail and food and hospitality have been severely affected by the coveted shutdown, declining demand for this type of product means fewer stock transactions, resulting in reduced demand for transportation, shipping and storage for traditional therapeutic retail, and food services.

Read next: “Exercise caution”: APRA writes to insurers

“As lockdowns become easier, you can’t just jump on one switch and extend the entire warehouse delivery system overnight,” he said. “It will take time to get the wheel in motion again and meet the huge demand of various small and medium sized businesses for products and products that they had no demand for.

“That’s why that industry emerges as a high-risk industry when you see arrears of payment.”

From a geographical point of view, the areas at risk of default have been most affected by the lockdown. At NSW, the Greater Sydney region of Maryland measured 7.76%, 7.66% and 7.53% from Guildford, Bringley to Green Valley and Canterbury, respectively, while the QLD region, which is dependent on domestic and international tourism, measured 7.4% from the Gold Coast and 7.45 from North and Kuala Lumpur. %.

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