The corona virus crisis continues with the World Health Organisation declaring it a global pandemic and you are probably aware that the situation is very fluid and things are moving rapidly, changing day by day.
The market decline came as the outbreak continued to spread outside of China; with Iran, South Korea and Italy reporting a surge in cases. Investors globally are worried that this could lead to a prolonged economic slowdown across the world.
No doubt, you have felt acute discomfort at recent lurid headlines highlighting the worst day for stock markets since 1987. I can assure you that we feel the discomfort just as much as you and we are working to assess the opportunities in the markets going forward.
While it is not possible to fully isolate our clients from the market falls we have tended to preserve capital reasonably well through diversification into a range of assets that have guarantees (provided that no knee jerk reactions are taken) and assets that do not correlate with equity markets.
This has meant that our clients have been isolated from the worst of the market volatility. Plainly, with the benefit of hindsight, we would have liked to have done more. We understand that these times are difficult for all of our partners and clients and, as ever, should you need to talk to us then please call or email us.
Unfortunately, there are several uncertainties involved in the current situation – how quickly a vaccine can be created, where will the virus spread next, and most importantly, how quickly the virus can be contained. The broad sense that we are getting at this juncture is it could still go ‘in any direction’.
Markets have been through crashes before.
Investors should remain calm and keep a weather eye on market movements, but not be panicked into making mistakes. Back in the 1987 crash, it took markets 1,357 days to recover and even longer for the 2008 financial crisis at 1,529 days. If you consider all the market crashes between 1969 & up-until 2020, it takes on average 648 days for the market to recover.
For our clients who hold medical insurance and protection policies:
Now that corona virus has been declared a pandemic, is members’ cover affected?
There are no exclusions for pandemics in our plans. Members will be covered for infection by corona virus as they would be for any other viral infection provided they don’t have applicable personal medical exclusions on their Certificate of Insurance.
Will members still benefit from emergency medical evacuation if they cannot be treated locally?
For members with a health plan, the benefit of emergency medical evacuations is unchanged. If a member needs in-patient treatment for corona virus that cannot be adequately provided locally, the Assistance Service will arrange for the member to be evacuated to the nearest hospital in their area of cover where the appropriate medical treatment is available.
While it is impossible to predict the future impact of COVID-19, history indicates that usually the global economy and equity markets have been relatively immune to the effects of past epidemics. We will keep you posted going forward whatever the outcome.