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Law360, London (June 9, 2020, 3:09 PM BST ) More than six in 10 businesses in Ireland that have attempted to claim for lost income under their policies for business interruption during the COVID-19 lockdown have had their claims rejected, a pressure group has found.
The Alliance for Insurance Reform said Monday it found that 63% of businesses that had claimed under their policies had been rejected. One in three, some 33%, of respondents were still waiting for a decision from their insurer.
The survey of more than 2,000 businesses, carried out in May and June, was published amid mounting anger toward insurers for rejecting claims under business interruption policies. The cover offers protection against lost earnings if a property is forced to close temporarily.
The alliance, which was formed in 2002 to tackle concerns that fraudulent claims had driven up the cost of insurance for honest policyholders, found that only 33% of businesses it polled had attempted to make a claim under their policies.
"The suggestion that this COVID-19 crisis may prove to be a financial Armageddon for insurers is completely undermined by the relatively low level of requests for business interruption payments or forbearance," said Michael Magner, the chairman of the alliance's working group on the pandemic and a hotel owner.
Magner said the country's central bank should "intervene aggressively on behalf of policyholders." Generalized statements are not enough, Magner added.
Officials at the Central Bank of Ireland wrote to insurance chief executives in March to urge them to "act honestly, fairly and professionally and in the best interests of their customers."
The Alliance for Insurance Reform found in its survey that a fifth, 22%, of customers who had renewed their policies since the pandemic had seen premiums increase.
"In an environment where there is a substantial reduction in economic and social activity levels for all sectors and, as such, a massive reduction in risk and turnover, this rise in premiums is a cause for concern for all policyholders," the pressure group said.
Insurance consultancy Mactavish said in April it had seen many examples of insurers stripping back cover and raising premiums at renewal. Approximately 500,000 businesses renewed their insurance from late March to early April,the London-based company said.
--Editing by Ed Harris.
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