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Moody’s said while losses and claims may be low, the insurance sector faces potentially damaging risks from the outbreak.
“We believe the sector as a whole faces the risk of reputational damage in the event of widespread non-payment of business interruption claims related to the coronavirus outbreak, as some policyholders may not be aware that infectious diseases were excluded,” said Dominic Simpson, vice-president and senior credit officer, at Moody’s.
UK insurance body the Association of British Insurers (ABI) confirmed last week that standard BI only covers firms against closure for physical damage.
The situation is similar in France and Germany, Moody’s said. The Federation Francaise de l’Assurance said “almost all” commercial insurance policies exclude claims due to epidemics but the government is speaking to insurers to find ways to support businesses through the pandemic. Germany’s insurance body, the GDV, said few businesses have bought additional BI protection against diseases.
Full article on Commercial Risk (subscription required)