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