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

April 20, 2020

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

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 Property of Default Market Signal model (PD), which uses stock price and assets volatility as inputs to calculate a one-year probability of default.

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

S&P points out that there are multiple reasons the airline industry is the 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:

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,” S&P noted.