Airmic, the UK Association for risk and insurance professionals, has urged the insurers to adopt a more responsible and business sensitive position on the COVID-19 pandemic or risk long-term damage to trust and reputation of the industry
In a statement issued on 12 May 2020, 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.”
It added that insurers 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.
Looking beyond the COVID-19 pandemic, the association has supported the creation of national catastrophic pooling and reinsurance mechanisms, such as the existing UK pools for terrorism and flood.
The statement said, “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.”
Airmic CEO John Ludlow said, “The insurance industry is at a critical juncture. Member surveys suggest the hardening market is already forcing businesses to look at alternative transfer options, and an ill-judged response to the pandemic could prove the trigger.
“We understand insurers are under stress but it is in the interests of all parties that we work together openly, constructively and collaboratively. For years, insurers have said they want to be business partners with our members. Now is the chance to put words into practice.”