So it is perhaps not surprising that Pfizer’s announcement this morning that it has developed a vaccine with a 90 percent effectiveness has met with such widespread positive response and sent stocks surging.
The language used by Pfizer’s chairman and CEO Albert Bourla to describe the development – as both a great day for humanity and potentially the most important scientific discovery of the past century – highlights the potential ramifications of the announcement.
Covid-19 – and most governments’ tough response to it – has had a huge impact on all our lives, and we all want the virus to be brought under control.
While (re)insurance stocks have boomed in the immediate aftermath of the Pfizer announcement, these gains have been dwarfed by those at some of the sectors hit hardest by the pandemic, such as retail, hospitality and air travel.
Those companies which gained the most from the lockdown, such as Zoom, Netflix and Peloton, have all seen their share price slump.
Digesting what this may mean for the insurance sector will take some time, and while the news is a positive step in the battle with Covid-19, it is important to sound a note of caution.
It will take some time for this positive news to have a meaningful impact and it arrives as parts of the world, including the US, are entering the time of year when a virus such as Covid-19 is expected to thrive.
The vaccine is not anticipated to be widely available until the third quarter of 2021 – there remains a long winter to get through.
The emergence of a vaccine should also not distract from the industry’s long-term efforts to better manage pandemic risk.
Covid-19 will not disappear with the emergence of a vaccine and further pandemics lie ahead – this event should serve as a wake-up call for society and insurers as to the impact a pandemic can have. An impact no one was properly prepared for.
While this is no time for complacency, the news brings several reasons for optimism.
If this vaccine leads to a reopening of the economy in 2021 that will be hugely positive in terms of reigniting demand for insurance cover in sectors where it has dropped, particularly areas such as aviation, hospitality and contingency.
A recovery in aviation and travel in particular – sectors where fears of bankruptcy and nationalisation have loomed – can only be a boon for the insurance industry.
And for brokers, whose fortunes tend to be closely tied to GDP, the news brings reasons for confidence in growth prospects.
Let us hope that today’s news is the start of a road to global economic recovery as the world begins to adapt to the Covid-19 virus.
There have not been many sunny days of optimism in 2020. This is one of them...
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