From a claims perspective, the CIT market has in fact remained fairly stable with no real changes to the frequency of major claims related to heists – either by lone-gunmen as is typical in the US, or from organised criminal gangs such as often occur across South America and in mainland Europe. The frequency of these major claims is also not expected to be impacted by the wider economic climate – however we do anticipate potential increases in smaller claims around the world.
For example, in the US we have already seen an increase in attacks on ATMs that tie in with raised levels of civil commotion around the last presidential election and increased tension around racial injustice. There is also potential for an increase in infidelity losses across India – where employees steal small amounts over a long time from their employers – if financial times get tough, although this may be headed off by the impending tightening of security as a result of new regulations from the Royal Bank of India.
Looking further ahead, there is also the ongoing debate over whether cash is dead and becoming obsolete. In Europe it may feel like the use of cash is on the wane, however, in the majority of Europe cash is increasing in circulation in relation to the level of Gross Domestic Product, with a few exceptions – including Sweden. This increase in cash is primarily due to the pumping of money into the economy through measures such as Quantitative Easing.
In some countries the use of cash is also definitely still king. This includes the US where many live outside of the banking system due to the relatively high cost of having a bank account, and in Africa where the lack of a consistently stable banking system has ensured to date that cash is still prevalent.
Overall, the Specie Market remains a key area of focus and growth for HDI Global Specialty despite potential headwinds from the wider economic fallout from Covid-19. In fact, there are many exciting opportunities for continued growth across all the lines we cover, including, for example, the opportunity for us to expand business in the precious metals, diamonds, jewellery and gold storage sector as companies and countries look to protect their more stable assets.