Insurers warn on forced payouts for uncovered coronavirus losses

The excerpted article was written by Simon JessopAbhinav Ramnarayan

LONDON (Reuters) – World insurers told governments on Monday that making them pay out on losses suffered due to the coronavirus that were not covered by policies risked destabilising the insurance industry.

With the global economy hammered by measures to halt the spread of the virus, companies are struggling to survive on tumbling revenues, prompting many to examine insurance policies for potential claims on disruption to their businesses.

In Britain, lawmakers have pushed insurers to show flexibility and Britain’s Financial Conduct Authority has told insurance companies that the behaviour of customers will change due to lockdown restrictions.

The Global Federation of Insurance Associations (GFIA) said insurers were committed to paying out on policies but said they should not be asked to cover areas where no contract existed.

“Where coverage for pandemics and other causes of loss were not included in existing policies or reflected in premium payments, requiring insurers to cover those losses retroactively could seriously threaten the stability of the global insurance industry,” the GFIA said in a statement.

“Events such as fires, motor vehicle accidents and natural catastrophes covered by insurance do not stop, even during a pandemic.”

Some regulators and supervisors had asked for additional data and information as they seek to manage the fallout from the coronavirus, but the GFIA said more coordination was needed.

“Coordination between governmental authorities – and the allowance of some flexibility to account for existing administrative burdens – will be very important in allowing the industry to concentrate time and resources on serving policyholders and confronting the pandemic,” it said.

Reporting by Simon Jessop, Editing by Edmund Blair

Vegas: Thomas Keller files suit over coronavirus insurance coverage

The excerpted article was written by  

Chef Thomas Keller, who operates Bouchon Bistro and Bouchon Bakery in The Venetian and is planning a new restaurant in Wynn Las Vegas, has filed what could be a groundbreaking lawsuit in a California court, asking for a legally binding decision on whether his business interruption insurance policy allows him to recover business losses suffered in connection with the COVID-19 crisis.

The suit, filed in the Superior Court of California County of Napa, addresses Keller’s policy with Hartford Fire Insurance Company. But the chef’s attorney, John Houghtaling, says there’s an industry-wide issue at stake.

“To avoid payments for a civil authority shutdown, the insurance industry is pushing out deceptive propaganda that the virus does not cause a dangerous condition to property,” Houghtaling said in a statement issued by the Thomas Keller Restaurant Group. “This is a lie, it’s untrue factually and legally. The insurance industry is pushing this out to governments and to their agents to deceive policyholders about the coverage they owe.”

Locally, Carson Kitchen’s owner and President Cory Harwell says he hopes Keller’s actions will set a precedent that will aid smaller businesses like his own.

“Without the Thomas Kellers of the world, without somebody blazing that trail for us, the little guy like me can’t really do anything. We’re stuck with whatever the insurance company says. Because we can’t expend our very precious resources that we do have on fighting a fight like this, when those funds are earmarked to try to stay alive, to keep our employees employed, and to keep our businesses afloat.”

Harwell has filed a claim with his insurance company on behalf of his restaurants in Las Vegas and Atlanta, under the terms of his business interruption coverage. He’s fearful, however, of how it will be received.

“Almost all (policies) have an exclusion in them for viruses and bacteria. So their stance on this is that this is an excluded event. And I know that that’s probably what’s coming back to us.”

He doesn’t believe that such a response would be appropriate in the current situation.

“A virus didn’t close my restaurant, the government did,” he explains. “And the government closing my restaurant is a protected event.”

At JRS Hospitality, which has temporarily stopped its operations at Alexxa’s, Beer Park, Cabo Wabo Cantina, Chayo Mexican Kitchen, Hexx Kitchen and Bar and Chateau Nightclub on the Strip, managing partners Corey Jenkins and Matt Silverman are having their attorneys prepare the business interruption insurance claims.

“We have not had a claim rejected,” Silverman explains. “But based on what we’re seeing in the news, we’re preparing for that possibility. That’s why we’re having legal do this for us the correct way, so that we have the best shot.”

“It seems obvious to us,” Jenkins says. “We were prevented from entering the premises and operating our business. That is a business disturbance. And that is exactly what business interruption insurance is for.”

 

Aon to buy Willis for nearly $30 billion in insurance mega-deal

Aon to buy Willis for nearly $30 billion in insurance mega-deal

(Reuters) – UK-based insurance broker Aon Plc (AON.N) said on Monday it would buy Willis Towers Watson (WLTW.O) for nearly $30 billion in an all-stock deal that creates the world’s largest insurance broker and adds scale in a battle with falling margins.

The deal unifies the sector’s second and third largest names into a company worth $76 billion by current share prices, overtaking market leader Marsh & McLennan (MMC.N), as they face challenges ranging from the coronavirus to climate change.

First mooted a year ago, the deal also comes after a period of brutal competition which has seen insurance premiums fall while claims continue to grow.

Aon confirmed last year that it was in early stage talks with Willis Towers before quickly scrapping the plans, without giving a reason.

Analysts said at the time that an Aon-Willis deal might have trouble clearing anti-trust hurdles. The deal terms state Aon will be obligated to pay a fee of $1 billion to Willis if the deal were to fall through.

Marsh last April sealed its own purchase of British rival Jardine Lloyd Thompson for $5.7 billion, cementing its position as the biggest global player.

Under the deal, Willis shareholders would receive 1.08 Aon shares, or about $232 per share as of Aon’s Friday close, representing a total equity value of $29.86 billion. The offer is at a premium of 16% to Willis’s closing price on Friday.

Shares in Aon were down 2.7%, while Willis’ shares rose just 1.42% in trading before the bell in a New York market that was set to fall heavily across the board due to Monday’s collapse in oil prices.

“Aon generally has a successful acquisition history but given the timing it is not certain how investors will react to the acquisition in the short-term,” said Paul Newsome, managing director at brokerage Piper Sandler.

When the deal closes, existing Aon shareholders will own about 63% and existing Willis investors will own about 37% of the combined company on a fully diluted basis.

The deal is expected to add to Aon’s adjusted earnings per share in the first full year of the deal, with savings of $267 million, reaching $600 million in the second year, with the full $800 million achieved in the third year.

Newsome said the deal multiple was about 19.3 times 2020 earnings per share (EPS) estimate of $12 for Willis and about 12.3 times its 2020 core earnings (EBITDA) estimate.

This compares to the peer group median trading at about 22.6 times earnings and 13.6x core earnings, he said.

The deal is subject to the approval of shareholders and regulatory approvals and is expected to close in the first half of 2021.

Aon will maintain its headquarters in London and the combined firm will be led by Aon Chief Executive Officer Greg Case Greg Case and Aon Chief Financial Officer Christa Davies.

Aon’s financial advisor for the deal is Credit Suisse Securities, while Willis was advised by Goldman Sachs.

Canadian companies require travelling employees to self quarantine amid COVID 19

By Tara Deschamps

THE CANADIAN PRESS

TORONTO _ Some Canadians planning overseas trips are being told by their employers to self-quarantine for weeks upon return in an effort to minimize the spread of a novel form of coronavirus.

Manulife Financial Corp. told The Canadian Press on Tuesday that it is requiring employees who have visited China, South Korea, Iran and Italy to observe a 14-day self-quarantine after they or anyone in their home has travelled to any of those countries.

Sean Pasternak, a spokesman for the Toronto-based insurance company, said Manulife has also suspended all but essential travel to and from mainland China. For personal travel, the company is encouraging employees to consider advice provided by health authorities.

“The health and safety of our employees globally is our priority, which is why we are monitoring the situation closely and taking necessary actions,” he said.  “We will continue to evaluate if additional steps or revisions to our current actions are needed.”

Meanwhile, Home Depot of Canada Inc.’s director of corporate communications Paul Berto said in email that his company has put all employee travel to and from Asia and Italy on hold until further notice and any employees who have returned from Asia and Italy within the last two weeks are being told to stay home for 14 days before returning to work.

“This is a very fluid situation and we’re watching it closely,” Berto said.

Both companies have also said they will follow the government’s guidance on how to deal with the virus known as COVID-19.

Canada has at least 33 cases of the new form of coronavirus, but it has infected and killed significantly more in China, Iran, Italy and South Korea.

Canada’s government is currently advising people returning from abroad to monitor their health for fever, cough and difficulty breathing for 14 days after they make it home.

Canadians who have travelled to Hubei province in China in the last 14 days are being told to limit their contact with others by self-isolating and staying home for two weeks from the date they left Hubei.

Jim Tiessen, the director of Ryerson University’s School of Health Services Management, said the policies Manulife and Home Depot have implemented are a good idea, but any companies that adopt coronavirus-related travel policies should be prepared to be flexible.

“They have to be selective on the countries they apply the strategy to and they have to be ready to change those countries because the situation is so fluid,” he said.

“Three weeks ago, it would have been okay to go to Italy and now they’re saying parts of Italy are not okay to go to and that happened over a weekend.”

Tiessen said a big component of managing the virus is being proactive.

Employees, he said, run the risk of travelling somewhere and then find themselves trapped abroad.

“And that’s even more of a problem because (employers) need them to be to do their work in the countries they’re working in,” Tiessen said.  “They have to care about their workers first, which I’m sure they do, but there’s also a public relations angle to this because they don’t want to be known as the company whose workers came back as patients.”

 

HUB International buys Morneau Shepell’s benefits consulting business for $70M

TORONTO _ Insurance brokerage HUB International Ltd. has signed a deal to acquire Morneau Shepell Inc.’s benefits consulting practice.

Morneau Shepell says Hub paid $70 million for the business.

Chief executive Stephen Liptrap says Morneau Shepell made the decision to sell the business after a comprehensive review.

He says the benefits consulting business is a strong, profitable asset and a great fit for Hub.

JP Girard, Morneau Shepell’s health and benefits consulting Canadian practice leader, has joined Hub as an executive vice-president.

Chicago-based Hub is a global insurance broker that provides property and casualty insurance, health and life insurance, employee benefits, investment and risk management products and services.

This report by The Canadian Press was first published March 2, 2020.

Life insurers leery about covering Canadians with new coronavirus

By Tom Blackwell | National Post

It’s not just doctors, public health experts and scientists who are struggling to figure out how much of a threat the novel coronavirus poses.

Like SARS and the pandemic flu before it, the newly emerged infection is presenting some unique challenges to Canada’s life insurance industry — and patients who might want to buy a policy.

Some companies say they would outright deny coverage to anyone who has contracted the disease, while others would insist potential clients be certified disease-free for at least three months, according to a new survey of the industry.

Their responses underscore what seems to be a growing reality in an era of globalization and mass travel. The novel coronavirus is the latest in a group of at least three other respiratory illnesses that have arisen and spread to varying extents in the last decade and a half.

Insurers don’t necessarily believe COVID-19 — the infection’s official name — is a particularly lethal bug, they’re just unsure about its true nature as a health hazard, says insurance broker Lorne Marr, who put together the report.

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