the covid-19 economy and impact to business...2020/08/07 · us continued ui claims, weeks on ui,...

The COVID-19 Economy and

Impact to Business

Hosted by Brown & Brown Insurance

© 2020 Brown & Brown, Inc. All rights reserved.bbinsurance.com/covid19 | August 21, 2020 2

Discussion Topics

Clinical and Medical Response Update

1The Macroeconomy and COVID-19

2Litigation Trends, Tort Shields, and Chamber Business Support Initiatives

3


Resource Center• Find more information on other insurance implications

at bbinsurance.com/covid19

• Resource Links:

• WHO - www.who.int/health-topics/coronavirus

• CDC - www.cdc.gov/coronavirus/2019-ncov/index.html

• National Business Group on Health -https://www.businessgrouphealth.org/topics/blog/the-evolving-situation-of-coronavirus-what-we-know-and-what-we-dont

• OSHA – www.osha.gov

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or direct them directly to your service team.

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https://www.bbinsurance.com/covid19

http://www.who.int/health-topics/coronavirus

http://www.cdc.gov/coronavirus/2019-ncov/index.html

https://www.businessgrouphealth.org/topics/blog/the-evolving-situation-of-coronavirus-what-we-know-and-what-we-dont

http://www.osha.gov/


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The information in this program is based upon the very dynamic and evolving outbreak of respiratory disease caused by a novel (new) coronavirus that was first detected in China and which has now been detected in more than 100 locations internationally, including in the United States. The virus has been named “SARS-CoV-2” and the disease it causes has been named “coronavirus disease 2019” (abbreviated “COVID-19”). The information presented is current as of the date of this program, but it may change in the coming hours and days ahead. Participants are encouraged to refer to information from the U.S. Centers for Disease Control and Prevention (“CDC” at www.cdc.gov).

The information provided in this live stream does not, and is not intended to, constitute legal, tax, or medical advice; instead, all information, content and materials available in this program are for general informational purposes only. Information on this live stream may not constitute the most up-to-date legal, tax, medical or other information. This program contains links and references to other third-party websites. Such links are only for the convenience of the participant, users or browser; Brown & Brown, Inc. and its teammates are not responsible for the contents of the third-party sites.

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seeking legal, tax, or medical advice from a professional in your area. Only your individual attorney, tax advisor, or health care professional can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this live stream program or any of the links or resources contained within this program do not create an attorney-client relationship, or doctor-patient relationship, between the participant, user, or browser and program presenters, authors, contributors, contributing third party organizations, or their employees/agents. All liability with respect to actions taken or not taken based on contents of this site are hereby expressly disclaimed. The content on this presentation is provided “as is;” no representations are made that the content is error-free.

Please be advised that any and all information, comments, analysis, and/or recommendations set forth relative to the possible impact of COVID-19 on potential insurance coverage or other policy implications are intended solely for informational purposes and should not be relied upon as legal or medical advice. As an insurance broker, we have no authority to make coverage decisions as that ability rests solely with the issuing carrier. Therefore, all claims should be submitted to the carrier for evaluation. The positions expressed herein are opinions only and are not to be construed as any form of guarantee or warranty. Finally, given the extremely dynamic and rapidly evolving COVID-19 situation, the commentary herein does not take into account any applicable pending or future legislation introduced with the intent to override, alter or amend current policy language.

Disclaimer


Today’s Presenters

Bob Lloyd Executive Vice President and General Counsel

Louise J. Short, MD, MScNational Clinical Leader

Dr. Robert Eyler, PhD

President

Economic Forensics and Analytics

Tom Quaadman

Executive Vice President

U.S. Chamber Center for Capital Markets Competitiveness

Steve Lehotsky

Executive Vice President and Chief Litigation Counsel

U.S. Chamber Litigation Center


Clinical and Medical Response Update

With Louise J. Short, MD, MSc

Brown & Brown, Inc. Strategic Benefit Advisors


Q&Awith Dr. Louise Short

Can you provide an update on new methods of testing, including home tests and saliva tests?


Test Considerations Accuracy Cost Per Test

Swab Testing • Offered at over 3,200 sites across the US • Backlogs at labs continue to delay return of results by up to 5 days >95% $50-$200

Saliva Test

• Solve for the shortage of swabs and other testing materials and requires less PPE to collect samples

• e.g. a person can collect their own sample rather than requiring a medical professional

• Yale, University of Illinois, Rutgers University, Becton Dickinson, Vault and Columbia University manufacture saliva tests

>90% $5-$150

Point of Care (POC)/ Antigen Testing

• Pro: Good for urgent care and medical facilities to produce rapid results for a small number of people

• Con: POC testing cannot analyze a large volume of tests at once85% $5-$10

Serological/ Antibody Testing

• Quantity of tests unknown, many vendors in the market without FDA approval could produce many false positives or false negatives

• Meaning of results unknown, immunity and length of immunity are TBD74%-96% $70-$130

Thermo Screening & Symptom Survey

• Can be used at point of entry coupled with a survey of symptoms to gather data on those entering a building. Requires training for personnel administering the screening and survey

Case by case $60/hour

Q&ATypes of Tests & Considerations

https://www.evive.care/



Can you share the latest data showing that minorities are at higher risk of getting COVID-19 and have a higher mortality rate? Why is this occurring?


Q&AData Trends Among Minorities

Source: https://www.cdc.gov/coronavirus/2019-ncov/covid-data/investigations-discovery/hospitalization-death-by-race-ethnicity.html

1 Data source: COVID-19 case-level data reported by state and territorial jurisdictions. Case-level data include about 80% of total reported cases. Numbers are unadjusted rate ratios.2 Data source: COVID-NET (https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/index.html, accessed 08/06/20). Numbers are ratios of age-adjusted rates.3 Data source: NCHS Provisional Death Counts (https://www.cdc.gov/nchs/nvss/vsrr/COVID19/index.htm, accessed 08/06/20). Numbers are unadjusted rate ratios.

Rate ratios compared to White, Non-Hispanic Persons

American Indian or Alaska Native, Non-Hispanic persons

Asian, Non-Hispanic persons

Black or African American, Non-Hispanic persons

Hispanic or Latino persons

Cases1 2.8xhigher

1.1xhigher

2.6xhigher

2.8xhigher

Hospitalization2 5.3xhigher

1.3xhigher

4.7xhigher

4.6xhigher

Death3 1.4xhigher

NoIncrease

2.1xhigher

1.1xhigher

https://www.cdc.gov/coronavirus/2019-ncov/covid-data/investigations-discovery/hospitalization-death-by-race-ethnicity.html





What are the latest findings on immunity and whether people can get COVID-19 more than once?


Q&AImmunity & Reinfection


The Macroeconomy and COVID-19

With Dr. Robert Eyler, PhD

President, Economic Forensics and Analytics

Professor, Economics at Sonoma State University

17

Agenda• Jobs and Recovery:

• So far, following most forecasts on GDP, with jobs doing better than expected

• US Unemployment in July: 10.2%, 11.37 million jobs lost from July 2019

• Continued claims as a focus of jobs recovery and policy• Policy and Broader issues:

• Jobs momentum and business survival: watching capacity closely• Have the forecasts changed and why?

• Housing and Commercial RE: now competition as workspace?• What to watch: being realistic about recovery and consumers

18

HowRecoveryWorks

Business Stable

Hiring workers

back

Stable Labor and Housing

Markets Regionally

Need to work in conjunction and depend on rising certainty

Caveats: labor force shifts and potential use of capital

19

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12.0

14.0

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1990

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Jul-1

991

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Jul-2

017

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018

Jan-

2019

Jul-2

019

Jan-

2020

Jul-2

020

URate(%ofLF),SeasonallyAdjusted,Jan1990– July2020,RecessionsShadedAreas

Sources: Bureau of Labor Statistics and EFA

20

USContinuedUIClaims,WeeksonUI,Jan2020– Aug2020

Sources: Bureau of Labor Statistics and EFA

0

5,000,000

10,000,000

15,000,000

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25,000,000

30,000,00001

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21

-35.0-32.5-30.0-27.5-25.0-22.5-20.0-17.5-15.0-12.5-10.0

-7.5-5.0-2.50.02.55.07.5

10.0

19901991

19921993

19941995

19961997

19981999

20002001

20022003

20042005

20062007

20082009

20102011

20122013

20142015

20162017

20182019

2020

Source: Bureau of Economic Analysis

GDPGrowth,1990– Q220201stEst.,SAAR,%Change(ShadedAreas=Recession)

22

-50.0

-40.0

-30.0

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00-Q

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GDPContributionbyMajorVariable,2000-2020Quarterly,US,%ChangeSAAR

Sources: Bureau of Economic Analysis and EFA

23

PhiladelphiaFedSurvey,August2020,GDPGrowthandUnemploymentto2023

Source: Philadelphia Federal Reserve Branch

Forecast was 0.7% off in Q2 from actual at median of these 40 forecasters.

Unemployment rate path more pessimistic than reality for now, which is good.

Think 2022 or 2023 before real feeling of recovery here.

24

ConsumerSentiment,UofMichigan,IndexQ11996=100,Jan2000– June2020

0.0

20.0

40.0

60.0

80.0

100.0

120.0

Jan-00 Dec-02 Nov-05 Oct-08 Sep-11 Aug-14 Jul-17 Jun-20

Inde

x 19

66:Q

1=10

0

Source: University of Michigan/FRED

25

JobsLost(%ChangefromPreviousYear),USinApril2020toJuly2020,ByIndustrySector

Source: Bureau of Labor Statistics and EFA

-7.5%-1.4%

-4.9% -4.1% -4.5% -5.0% -6.7% -7.5%-10.4%

-6.1% -8.1%-5.5%

-15.6%-10.0%

-19.7%

-37.8%

-60.0%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

Total Nonfar

m

Financia

l Acti

vities

Wholesa

le Trade

Constructi

on

Government

Nondurable Goods

Professi

onal and Busin

ess Servi

ces

Transporta

tion and W

arehousing

Informati

on

Durable Goods

Educatio

nal Service

s

Retail Trade

Mining and Logg

ing

Other S

ervice

s

Food Servi

ces a

nd Drinking Place

s

Accommodati

on

Apr-20 May-20 Jun-20 Jul-20

26

PermanentJobLosses,ThousandsofWorkers,January1994– July2020,Shading=Recession

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Jan-

94Ju

l-94

Jan-

95Ju

l-95

Jan-

96Ju

l-96

Jan-

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l-97

Jan-

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l-98

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l-99

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l-00

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l-01

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l-02

Jan-

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l-03

Jan-

04Ju

l-04

Jan-

05Ju

l-05

Jan-

06Ju

l-06

Jan-

07Ju

l-07

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

10Ju

l-10

Jan-

11Ju

l-11

Jan-

12Ju

l-12

Jan-

13Ju

l-13

Jan-

14Ju

l-14

Jan-

15Ju

l-15

Jan-

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l-16

Jan-

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l-17

Jan-

18Ju

l-18

Jan-

19Ju

l-19

Jan-

20Ju

l-20

Thou

sand

s of P

erso

ns

Source: U.S. Bureau of Labor Statistics/FRED

Unemployment Level - Permanent Job Losers Permanent Job Losses = Workers where current employer informed worker they are not to be hired back in future by that employer.

May be a pre-cursor to structural change

27

State-LevelUnemploymentRates,July2020State highlights:

UT, NE, ID under 5%

NV down to 14% from 28.2% three months ago

CA at 13.3%, slower movements down

NY 15.9%

TX 8.0%

FL, IL 11.3%

Source: U.S. Bureau of Labor Statistics

28

MedianListingPrice,Current$,SelectedStatesandMSAs,July2016– July2020

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

Jul-2

016

Sep-

2016

Nov

-201

6

Jan-

2017

Mar

-201

7

May

-201

7

Jul-2

017

Sep-

2017

Nov

-201

7

Jan-

2018

Mar

-201

8

May

-201

8

Jul-2

018

Sep-

2018

Nov

-201

8

Jan-

2019

Mar

-201

9

May

-201

9

Jul-2

019

Sep-

2019

Nov

-201

9

Jan-

2020

Mar

-202

0

May

-202

0

California Nevada Chicago New York MSA Seattle Atlanta Denver Houston

Source: Federal Reserve (fred.stlouisfed.org)

29

735

3,3043,385

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Jan-2000

Feb-2001

Mar-2002

Apr-2003

May-2004

Jun-2005

Jul-2006

Aug-2007

Sep-2008

Oct-2009

Nov-2010

Dec-2011

Jan-2013

Feb-2014

Mar-2015

Apr-2016

May-2017

Jun-2018

Jul-2019

Aug-2020

S&P500,Jan2000toAugust20,ShadedArea=Recession


30

10Year- 3month TreasuriesSpreadandEffectiveFFR,Jan2019toAugust2020,%,Daily


-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.001

/01/

2019

01/2

2/20

19

02/1

2/20

19

03/0

5/20

19

03/2

6/20

19

04/1

6/20

19

05/0

7/20

19

05/2

8/20

19

06/1

8/20

19

07/0

9/20

19

07/3

0/20

19

08/2

0/20

19

09/1

0/20

19

10/0

1/20

19

10/2

2/20

19

11/1

2/20

19

12/0

3/20

19

12/2

4/20

19

01/1

4/20

20

02/0

4/20

20

02/2

5/20

20

03/1

7/20

20

04/0

7/20

20

04/2

8/20

20

05/1

9/20

20

06/0

9/20

20

06/3

0/20

20

07/2

1/20

20

08/1

1/20

20

Perc

ent

10 year - 3 month Effective FFR

31

60.0%

70.0%

80.0%

90.0%

100.0%

110.0%

120.0%

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Nat

iona

l Deb

t to

GDP

(%)

Jan 2020 CBO With Coronavirus Structural Change

DebtandPoliticalConsiderations:CBOestimates inMay2020to2030afterCARESAct,%ofNationalDebttoGDP

Sources: Congressional Budget Office (CBO) and EFA

?

32

DollartoEuroExchangeRates,$/€,August2010toAugust2020,WeeklyNominalValues,notseasonallyadj.(increasemeans$“weaker”against€)

1.18

1.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40

1.45

1.50

Aug-2010

Feb-2011

Aug-2011

Feb-2012

Aug-2012

Feb-2013

Aug-2013

Feb-2014

Aug-2014

Feb-2015

Aug-2015

Feb-2016

Aug-2016

Feb-2017

Aug-2017

Feb-2018

Aug-2018

Feb-2019

Aug-2019

Feb-2020

Aug-2020

Sources: Federal Reserve (fred.stlouisfed.org)

33

• GDP Growth: need Q3 and Q4 to show the economy is rising from ashes

• 10-Year Treasury Rates: Do not expect much lift here, especially if financial markets otherwise wobble based on changing news or timelines

• Consumer Spending: confidence moving with virus counts• Business Confidence: better but volatile with virus counts• Bottom line: need vaccine and winter to be tricky without it

• Risks toward 2021• Hotel• Office with high costs of adjusting to new rules• Retail, specifically in downtowns and malls• Multi-family due to lack of migration to suburban or urban CA from other places

for now

CommREDriversandRisks

34

JusttheBeginning?Millionsofft2 ofOfficeAvailable

Source: CBRE Research

35

TheChallengesforHigherEducation

Source: Google Images, ESPN

36

DepthandDuration

37

WhattoWatchtoward2021• Labor market changes:

• Continued UI claims data: need to continue to trend down• Business losses: is structural change coming?

• Fall and winter: caseloads expected to rise, economy affected?• Presidential Election a wild arena• No forecasts adjustments yet to major redux in fall and winter

• Policy: depth and duration• How much more can be done? Prudence versus politics

and debt• Fiscal package to come in December likely to generate a

lot of debate and concern either way (short- vs long-term)

38

Thanks!

[email protected]

@bobby7007


Litigation Trends, Tort Shields, and

Chamber Business Support Initiatives

Steve Lehotsky

Executive Vice President and Chief Litigation Counsel

U.S. Chamber Litigation Center

40

4. Cases & Issues to Watch

2. Federal Legislation

3. State Legislation

COVID-19 Legal Update

1. Litigation Environment

41

Tom Quaadman

Executive Vice President, CCMC

42

a

Small, Medium and Large Business Financing Under the CARES Act

MAIN STREET EXPANDED LOAN PROGRAM AND MAIN STREET NEW LOAN PROGRAM—Both the Main Street Expanded Loan Facility (“Expanded Facility”) and the Main Street New Loan Facility (“New Loan Facility”) are intended to facilitate lending to small and medium-sized businesses by Eligible Lenders.

TERM ASSET-BACKED SECURITIES LOAN FACILITY—The Term Asset-Backed Securities Loan Facility (TALF) is intended to help meet the credit needs of consumers and businesses by facilitating the issuance of asset-backed securities (“ABS”).

SECONDARY MARKET CORPORATE CREDIT FACILITY—Under the Secondary Market Corporate Credit Facility (SMCCF), $25 billion from Treasury will be assigned to a Special Purpose Vehicle that will purchase in the secondary market eligible individual corporate bonds and eligible corporate bond ETFs.

43

Small, Medium and Large Business Financing Under the CARES Act

MUNICIPAL LIQUIDITY FACILITY—The Municipal Liquidity Facility (“Facility”), which has been authorized under Section 13(3) of the Federal Reserve Act, will support lending to U.S. states and the District of Columbia, U.S. cities with a population exceeding one million residents, and U.S. counties with a population exceeding two million residents.

PAYCHECK PROTECTION PROGRAM LENDING FACILITY—The Paycheck Protection Payment Lending Facility (“the Facility”) allows lending by eligible borrowers to small businesses under the Paycheck Protection Program (PPP) established by the CARES Act on a non-recourse basis, taking PPP loans as collateral.

PRIMARY MARKET CORPORATE CREDIT FACILITY—Under the Primary Market Corporate Credit Facility, $50 billion from Treasury will be assigned toward a Special Purpose Vehicle to purchase direct bond issuance from eligible issuers with a maturity of 4 years or less and portions of syndicated loans at issuance (no more than 25% of any loan syndication).

cont.

44

5. Any program should avoid mandating that insurance companies write, or service policies associated with any federal program to cover pandemics

4. Any federal program to provide for pandemic relief should be established through a federal trust fund or through government-sponsored insurance

2. No abrogation of contracts

3. Any legislation that would establish a prospective pandemic program should go through a full, transparent, and deliberative process

Pandemic Insurance Principles

1. Fully fund business relief efforts

45


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