Airmic calls for change in approach to insurers’ pandemic response
- Published: Friday, 15 May 2020 11:48
Airmic, the UK association for risk and insurance professionals, has urged the insurance market to adopt a more responsible and business sensitive position on the COVID-19 pandemic or risk long-term damage to trust and reputation and loss of customers.
In a statement, the association said:
With many corporates facing an existential threat from global governments’ lockdown measures and a deep recession likely to follow, we expect brokers and insurers to demonstrate fairness and flexibility with regards to claims and renewals. The harsh market is already straining relations with many corporate clients, and insurers’ rigid interpretation of wording regarding the pandemic could accelerate this deterioration.
Airmic believes insurers have a choice. They can either interpret ambiguous contract wordings with their balance sheet in mind, or they can act as partners to long-standing customers who seek business protection. All parties will benefit from a partnership approach to the current crisis.
Following a member consultation, Airmic calls for:
- The avoidance of last-minute and poorly communicated changes in underwriting policy, including cover limits and exclusions;
- Constructive dialogue in wording disputes and a willingness to look favourably on grey area claims;
- Flexibility in cover and rebates for reduced risk exposure relevant to current trading conditions and business operations;
- Recognition of the cumulative impact of the harsh market and pandemic on renewals;
- A commitment to avoid COVID-19 exclusions on Directors & Officers policies;
- Business Interruption covers that are fit for modern business risk profiles, which may include the increased use of parametric tools to protect cash flows; and
- Greater collaboration and communication between businesses, insurers and brokers to allow innovation and opportunity to emerge from the crisis.
Looking beyond the COVID-19 pandemic, the association supports the creation of national catastrophic pooling and reinsurance mechanisms, such as the existing UK pools for terrorism and flood. They must, however, be embedded in broader national and international risk strategies and should themselves be pooled to ensure the efficient use of capital.
Airmic believes a truly collaborative approach, joining up the public, private and academic sectors may be the only long-term option and Airmic is working with industry and government bodies to explore how to turn this into a reality.