Insurance Jottings

UK Insurers Urged by Treasury Committee to Pay Coronavirus Claims

Insurers need to pay out on more claims related to the coronavirus pandemic, according to the head of the UK parliamentary committee which oversees the financial industry.

 

“We are concerned that the insurance sector goes the extra mile in meeting claims wherever possible, for example where there may be grey areas within policies,” Mel Stride, chairman of the Treasury Committee, said in a statement on the 25th April.

 

Mr Stride’s comments echo the stance taken by the main UK markets regulator, which sent insurance companies’ shares tumbling last week after it told them to pay valid claims quickly.

 

The issue came to the fore after insurer Hiscox Ltd rejected claims filed by policyholders who had coverage for business interruptions caused by contagious disease. Those policyholders appealed to the regulator, which is reviewing their case.

 

UKHospitality, an industry group for businesses such as restaurants, bars and hotels which have been hard hit by the government’s virus lockdown, told the Treasury Committee that 71% of its members had claims rejected, according to the statement.

 

Separately, UBS Group AG has estimated total insured losses of US$30 billion to US$60 billion as a result of the pandemic.

 

That would be the biggest on record for a single event, and while the Swiss bank said it remained confident European insurers’ balance sheets could withstand the hit, the level of uncertainty remained high

 

Paying for excluded Covid-19 exposures risks industry’s solvency: Benchimol

Axis Capital’s CEO Albert Benchimol has become the latest industry figure to say it is not reasonable to expect insurers to pay out for Covid-19-related claims which have not been underwritten or priced for and doing so would “put at risk the solvency of our industry.”

 

In a letter to shareholders, he reiterated that the (re)insurance industry’s purpose is to “mutualise risk, not to subsidise it”.

 

John Neal: Covid-19 “largest insurance challenge industry has ever faced”

Lloyd’s CEO John Neal has warned that the Covid-19 pandemic has the potential to dwarf major disasters such as Hurricane Katrina or the 9/11 terror attacks and lead to losses into the “hundreds of billions”.

 

European (re)insurance stocks mixed as investors grapple with tumbling oil prices

22nd April – European (re)insurance stocks seesawed between gains and losses in morning trading as volatility across the oil markets continued to hit investor confidence, partially offset by continuing reports that progress is being made towards finding a coronavirus vaccine.