LONDON (1) – World insurers informed governments on Monday that making them pay out on losses suffered because of the coronavirus that weren’t lined by insurance policies risked destabilising the insurance coverage trade.
With the worldwide financial system hammered by measures to halt the unfold of the virus, firms are struggling to outlive on tumbling revenues, prompting many to look at insurance coverage insurance policies for potential claims on disruption to their companies.
In Britain, lawmakers have pushed insurers to point out flexibility and Britain’s Monetary Conduct Authority has informed insurance coverage firms that the behaviour of shoppers will change as a consequence of lockdown restrictions.
The World Federation of Insurance coverage Associations (GFIA) stated insurers have been dedicated to paying out on insurance policies however stated they shouldn’t be requested to cowl areas the place no contract existed.
“The place protection for pandemics and different causes of loss weren’t included in present insurance policies or mirrored in premium funds, requiring insurers to cowl these losses retroactively might critically threaten the steadiness of the worldwide insurance coverage trade,” the GFIA stated in an announcement.
“Occasions comparable to fires, motorcar accidents and pure catastrophes lined by insurance coverage don’t cease, even throughout a pandemic.”
Some regulators and supervisors had requested for extra knowledge and data as they search to handle the fallout from the coronavirus, however the GFIA stated extra coordination was wanted.
“Coordination between governmental authorities – and the allowance of some flexibility to account for present administrative burdens – will probably be crucial in permitting the trade to pay attention time and sources on serving policyholders and confronting the pandemic,” it stated.
Reporting by Simon Jessop, Enhancing by Edmund Blair