AM Best: Recession Length Depends On COVID-19 Path

OLDWICK, N.J.--(BUSINESS WIRE)-- In this episode of ^AMBestTV, Ann Modica, economist, AM Best Rating Services, said U.S. growth is expected to slow dramatically in second-quarter 2020, as is consumer spending, exports and other macroeconomic factors; however, economic reverberations of social distancing may be needed to slow the spread of COVID-19. “We basically need to cause a recession in order to curtail the spread of the disease," said Modica. Click on http://www.ambest.com/v.asp?v=covid19economy320 to view the entire program.

Modica also addressed the uncertainty surrounding the demand for products, as well as investments. She said, “There is muted business spending, and unfortunately, a large uptick in the unemployment rate.”

Looking ahead, Modica said that the government’s ability to spur recovery once the COVID-19 crisis ends could be hampered.

“The length of the recession is largely dependent on the path of the virus. However, an eventual recovery would largely be tepid due to the government's limited resources as it has already implemented a lot of accommodative monetary policy, as well as fiscal policy, and it is not going to have a lot of room to implement those further.”

Recent episodes of ^AMBestTV include:

• Attorney: States May Look to Insurers to Bail Out Small Businesses: State regulators are wary of legislation to expand business interruption insurance to include pandemic, said Mary Jo Hudson, partner, Squire Patton Boggs: http://www.ambest.com/v.asp?v=hudson320.
• Coronavirus in the Work Place: Jamie Kalamarides, Prudential Group Insurance president, and Stacie Engelmann, Lockton, human resources consultant, discuss the implications of widespread working from home due to COVID-19: http://www.ambest.com/v.asp?v=coronavirusworkplace320

^AM BestTV covers exclusive AM Best and insurance industry information and reports, targeted topics and key developments in the insurance, reinsurance and related sectors daily. Sign up for alerts of episodes at www.ambest.com/multimedia/ambtvsignup.html. View ^AM BestTV episodes at www.ambest.tv.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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