Mel Stride MP, chairman of the parliamentary Treasury Committee, has written to the Association of British Insurers requesting extensive data on how its members plan to approach claims for losses in connection with COVID-19, which has infected more than 400,000 people worldwide.
“It is a concerning time for all of us in the face of the coronavirus threat,” Stride wrote. “As such, many will be looking to their insurer for both flexibility and assurance.”
The COVID-19 outbreak has raised concerns about whether standard clauses for business interruption or infectious disease cover losses associated with a global pandemic. Lawmakers say consumers want clarity from insurers on how they plan to approach COVID-19-related claims.
The Treasury Committee has requested detailed data from insurers about their response to the crisis, including how many companies have stopped offering some products during the crisis or changed their terms.
The politicians also asked ABI members to estimate how much they expect to pay out in coronavirus-related claims. Members should also provide details of how they plan to approach business interruption policies as the outbreak spreads, lawmakers said.
Insurers should also give the committee details of how they are communicating with consumers about the insurance implications of COVID-19. The committee warned insurers it expects a swift response and will be making all data it receives publicly available.
U.K. insurers, including Admiral, Aviva and Liverpool Victoria, have scaled back the scope of their travel insurance or simply stopped selling policies since the outbreak started.
The Association of British Insurers said Tuesday that travel insurers in Britain could be hit with a bill of at least £275 million ($329 million) in claims over the crisis, the highest pay-out on record for passenger flight cancellations.
Britain’s Financial Conduct Authority wrote to insurers on Thursday urging them to show fairness and flexibility when assessing claims related to the coronavirus.
The watchdog said insurers should be prepared for a change in the way their customers behave during the outbreak — such as individuals choosing to work from home or commute by car. These changes should not impair a consumer’s ability to claim under home and motor policies, the FCA said.
Other regulators have taken similar steps to urge insurers to be fair amid the crisis. An Irish lobby group said Wednesday that Irish insurers were adopting a “blanket ban” on COVID-19 claims. The Alliance for Insurance Reform urged insurers to adopt a more reasonable response.
--Additional reporting by Martin Croucher and Najiyya Budaly. Editing by Alyssa Miller.
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