The short-run impact of COVID-19 on the activity in the insurance industry in the Republic of North Macedonia

TL;DR

This study analyzes the COVID-19 pandemic's short-term effects on North Macedonia's insurance industry in early 2020, revealing a significant activity decline and structural shifts among insurance classes.

Contribution

It provides the first quantitative assessment of COVID-19's impact on North Macedonia's insurance sector using seasonal autoregressive models.

Findings

Insurance activity declined over 10% during early 2020.

Structural shifts occurred, with motor vehicle insurance decreasing and property insurance increasing.

Total industry losses were less than the funds allocated by authorities.

Abstract

This paper investigates the impact of the COVID-19 pandemic on the insurance industry in the Republic of North Macedonia during the first half of 2020. By utilizing seasonal autoregressive models and data for 11 insurance classes, we find that the insurance activity shrank by more than 10% compared to what was expected. The total loss in the industry was, however, much less than the amount of funds made available by the Insurance Supervision Agency. This was because the pandemic induced changes in the activity structure - the share of Motor vehicles class fell at the expense of the property classes.