“We were asked by our board to stress test the possible exposures from the pandemic and they were surprised by our optimism when we reported back earlier this year. However, the problem is that today we don’t know the extent of the damage or the extent of the recovery. And that is the extent of recovery in all those other sectors for which we sell insurance,” he says.

The good news, he believes, is that insurers are generally well capitalised thanks to the work of the ratings agencies, so they are in a position to survive shocks – anything from an earthquake to a pandemic.

Mr Karekezi predicts that insurers in more mature markets may well face greater problems because of the shape of their books. For example, in Africa (with the exception of South Africa) event cancellation is not commonly sold and nor is business interruption, unless it has a physical damage requirement, which means few Covid-19 events will be covered.

“The greater risk,” he says, “is in terms of premiums lost because businesses are not there in the future. It is likely to affect our business for the rest of 2020 and into 2021.”

Measuring the true cost of the pandemic on economies is some distance off, however Mr Karekezi says it is also impossible for the insurance sector to start considering re-orienting products or services either, because no one knows what will emerge.

“No one is really working at the moment, so it is hard for us to react. Even something like the agricultural sector has been hit because of a lack of workers.

“The one group that is really working is the IT sector, because they have been in demand like never before as we all work from home,” adds Mr Karekezi.

In Nigeria, one of the greatest concerns has been the impact on the oil sector. Prices have plummeted, which not only creates massive issues for the country’s economy as a whole but also brings challenges for the insurance sector.

Mr Karekezi cites one operator that had planned to open 20 new fields this year but has cut that back to four. The result will be a massive dip in premium income for insurers and then in turn for reinsurers.

The true impact, he believes will begin to emerge when the next renewal season comes around.

So, what can insurers and reinsurers be doing to support their clients through the crisis? Mr Karekezi fears that insurers can do little but offer support and open dialogue with clients, and be available as and when clients want to discuss claims.

Transparency on wordings is critical, he says, and clients need to fully appreciate exactly how insurance works and what will be covered: “Some have asked for premium rebates, for example, but we need to explain to them how insurance works and that even if a plant is shut down it still requires protection. There has also been talk of premium relief, particularly in South Africa.”

The challenge for insurers is that if they refuse such calls, they are likely to lose that business as a client anyway come the next renewal, he warns.

As many African markets turn to the recovery stage and look to find ways of getting people back to work, insurers have a role to play in providing continuity of service to their clients.

But insurers are also employers and Mr Karekezi says it will be some time before they can open up their offices to anything like business as usual.

“The risk for us all is actually much higher as we start to emerge than it was when we locked down,” cautions Mr Karekezi. “For example, for our own business we cannot afford to return to the office and have someone inadvertently bring in the virus – it risks taking the business down completely.”

That is reflected across society. And one thing that worries Mr Karekezi is that it will increase the divide between the haves and the have-nots still further. “Only those that have access to electricity and to wifi can work at home and continue to service their clients. Businesses have to establish who can actually work at home and who needs to return soonest,” he says.

There is also going to be a huge psychological impact, warns Mr Karekezi. “We are going to have to get used to doing business without physically meeting. In terms of the actual work, I can work from home forever – I know my partners and we have trust that is well established.”

However, there is a cost to that. At an immediate level, it means no job for his driver, for example, and no one at the office needs to be there to greet visitors. It will help in reducing costs but not in balancing the divide between rich and poor, he says.

Staying at home has also meant a huge reduction in the travel budget – money Mr Karekezi has put to good use in buying new work computers for every employee to have at home, which has also had a knock-on benefit because it has improved internet security for the group.

Cyber risk has emerged as a massive threat through the pandemic as hackers have upped their activity through the lockdown. This could well be an area of opportunity for insurers in offering enhance insurance products to their clients.

It could also be an opportunity as society develops a new post-coronavirus normal in which increased numbers continue to operate from their homes.

“So much is linked to the security of the internet,” warns Mr Karekezi. “If the internet shuts down, you are closed down completely. As a company you have to think not just about the security of the computer but of the broader infrastructure and whether it will support your staff working remotely.”

However, despite those challenges, Mr Karekezi believes that home or remote working will become the new normal – at least until a vaccine is found and people have the confidence to return to work. The question is whether, in that time, a sea change in societal behaviour means we ever go back to pre-Covid-19 ways of working.

COVID-19, CRA Newsletter