StanChart on how the insurance sector is responding to COVID-19

The global outbreak of COVID-19 has left an indelible mark on the world economy, and the financial sector has had to grapple with unprecedented challenges. Paul Njoki, the Head of Wealth Management at Standard Chartered Bank Kenya, provided insightful commentary on the current financial landscape and the role of the insurance sector in the wake of the pandemic. The outbreak of COVID-19 caught the financial markets off guard, leading to significant disruptions in supply chains and a sharp downturn in market indices across the world, with drops of up to 30%. However, there has been a notable recovery of around 20% in the markets, indicating a positive response from the investing community. Central governments, including the Fed and the Bank of England, have implemented measures to support the markets, which have been well received. In Africa, investor sentiment has been cautious, leading to reduced market activities. Wealth managers have been working closely with clients to review portfolios, take advantage of discounted market opportunities, and realign investments towards sectors showing resilience, such as technology and healthcare. Despite the challenges, there is optimism for a gradual recovery in the financial markets. Njoki highlighted the asset management landscape, comparing the first quarters of 2019 and 2020. While 2019 witnessed significant growth, the onset of the pandemic led to market sell-offs and asset value downturns, akin to levels seen in early 2019. However, client investments remained steady, with a resurgence in portfolio growth, especially in equities. The outlook for the remainder of 2020 remains positive, with expectations of continued market recovery. Looking ahead, Njoki outlined key action plans for post-outbreak scenarios, emphasizing the importance of robust economic stimulus packages, monitoring infection rates, progress on vaccine trials, and adapting to evolving work dynamics driven by technology. The evolving landscape presents opportunities for technology companies and services to thrive as remote work and digital solutions gain prominence. When addressing the role of the insurance sector during the outbreak, Njoki commended insurance companies for steps taken to support clients, such as waiving claim restrictions related to COVID-19 treatment and offering premium relief to policyholders facing financial strain. While the sector has shown responsiveness, uncertainties persist about the long-term impact of the pandemic on health systems and insurance capacities. Njoki emphasized the need for continued government support in the healthcare sector to manage the crisis effectively.