COVID-19 Impact
In our property/casualty brokerage operations, during the second quarter 2020, our (a) new business generation remained at pre-pandemic levels, (b) retention and non-recurring business were both lower than pre-pandemic levels, (c) renewal customer exposure units (i.e., insured values, payrolls, employees, miles driven, etc.) showed some decline; however, premium rates across most geographies and lines of coverage have continued to increase, effectively mitigating the decline, and (d) net positive mid-term policy modifications were also lower.
In June and thus far in July, renewal customer exposure units showed improvement compared to lows seen in April and May as our customers restarted and reopened their businesses, full policy cancellations have remained similar to pre-pandemic levels, and we continue to see property/casualty premium rates move higher overall which may partially, or fully, offset future declines in exposure units, if any.
In our employee benefits brokerage operations, during the second quarter 2020 and thus far in July, we saw a decrease in new consulting and special project work and a decrease in covered lives on renewal business, but not to the same level as increases in unemployment claims. We believe the decline in covered lives could persist over the next few quarters, and deteriorate further, if the economy is slow to recover.
In our risk management operations, we began seeing a meaningful decline in new claims arising during the last two weeks of March, which persisted into April. In each of May, June and July, we did see an improved level of claims; however, new claims arising are still well below pre-pandemic levels. A slower recovery in the number of workers employed could cause fewer claims arising in future quarters.
Our clean energy investments saw lower electricity consumption in the U.S. due to reduced economic activity, milder temperatures and falling natural gas prices. These conditions, which began in mid-to-late March, continued through June 30. Thus far in July, production has increased due to warmer weather in our operating locations; however, we expect a reduced level of production for the remainder of 2020.
We activated our business continuity plan in mid-March. Over 90% of our staff is still working remotely and approximately 20% of our nearly 1,000 locations are open; but most of which are only partially open. We believe our service levels are unchanged from pre-pandemic levels. We have not had any office-wide outbreaks of COVID-19, and fewer than 100 confirmed cases amongst our 33,000 employees - all of which we believe contracted the virus outside of our office locations.
Given the deterioration in economic conditions, we are actively managing costs by limiting discretionary spending such as travel, entertainment and advertising expenses, adjusting our real estate footprint, reducing capital expenditures, limiting use of outside labor and consultants, increasing utilization of our centers of excellence, and implementing a support-layer hiring and wage freeze. In addition, we have adjusted portions of our workforce where volumes have declined significantly and normal attrition is not sufficient; which, to date has impacted less than 3%, and may impact an additional 1% in 2020, of our global workforce.
The impact of these actions in the second quarter of 2020 was substantial; with estimated savings of approximately $74 million pretax compared to second quarter 2019, as adjusted for pro forma full-quarter costs related to acquisitions closed after March 31, 2019. Offsetting these savings were severance and lease termination costs of approximately $14 million pretax related to these actions. We believe savings in the third and fourth quarters compared to the same quarters in 2019, could total between $60 million and $70 million pretax per quarter after adjusting for pro forma full-quarter costs related to acquisitions. Offsetting possible future savings would be additional severance and lease termination costs, which we estimate could total approximately $5 million to $10 million pretax per quarter related to these actions. Future net savings may be lower if the economy recovers faster than our forecasts or our costs to implement changes exceed our estimates.
We have not seen any meaningful decline of cash receipts from our clients to date and we have approximately $1.3 billion of available liquidity. A prolonged economic downturn may cause a deterioration of future cash collections but we believe our cost savings, reduced non-client facing capital expenditures and working capital improvements could mitigate a potential decline in our cash flows over the near-term.
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