Economist: Insurers will thrive during recession

by David Masters

Story link: Economist: Insurers will thrive during recession

Insurers will flourish during the recession, according to the Economist magazine.

Fewer claims and reduced claims costs mean that the economic downturn is a big positive for insurance firms.

In particular, recession pushes down motor accidents because people drive less.

Injury claims also fall because the most dangerous industries – construction and manufacturing – are the hardest hit by economic turmoil.

Furthermore, in developed countries non-life policies are usually mandatory.

Anyone wanting to buy a house with a mortgage, drive a car, or employ a worker will normally need insurance.

Looking back over the history of US insurance, profitability has no obvious links with the economic cycle.