When the Covid-19 pandemic is over, what will people’s memories be of the UK insurance industry?
Going by the past week’s experience, it could well be statements such as “insurance for business interruption resulting from Covid-19 is likely to be rare” and “if the couple getting married decide to cancel their wedding due to coronavirus, insurance will not cover this”.
Insurers cannot be criticised too harshly for sticking to the terms of a contract; not doing so threatens their ability to honour their policies.
But at the moment they are doing little beyond the business-as-usual – such as paying claims and helping customers through that process – albeit at a more intense level for travel policies.
What kind of message does that send out?
At a time when many people are panic buying, losing their jobs, and feel they have only themselves to rely on, this is the time for UK insurers to shine and be more relevant than ever.
Many other businesses are turning this crisis into an opportunity to be proactive and do social good.
But just what positive and practical action have UK insurers taken to help their clients?
In China, insurers have donated billions-worth of risk protection to frontline medical staff battling the coronavirus outbreak.
China Taiping Insurance Singapore has become the latest underwriter in Singapore to expand cover for life customers to the coronavirus, and is believed to be the first to promise to pay a bonus worth S$1,000 ($720) to those who get better.
AIA’s Singaporean customers are receiving extra cover for free, if Covid-19 hospitalises them, and is paying for 50,000 remote consultations with a local tele-medicine provider.
Closer to home, Generali has launched a fighting fund worth up to €100m ($111m) in a bid to help Italy battle the pandemic.
French insurers said yesterday they will continue to cover small businesses even if renewal payments are late, for the duration of the confinement period.
With markets in meltdown and fear spreading as quick as the virus itself, now is the time for UK insurers to step up. Show some solidarity and be at people’s side - and avoid a reputational risk crisis.
It makes sense morally, socially and commercially.
The Association of British Insurers (ABI) responds
Insurers are handling many thousands of customer enquires each day and are committed to making sure customers’ claims are paid throughout this time. It is currently expected travel insurers will have around 400,000 travel insurance claims and pay out £275m ($324m) to people whose travel plans have been disrupted by Covid-19.
As a result, we expect to pay out two to three times more than the whole of the previous year for travel cancellation insurance, amounting to hundreds of millions back in the pockets of customers and the most since records began.
ABI travel insurance members have pledged to ensure customers are provided with up-to-date information around the coronavirus outbreak and publish clear information at the point-of-sale around the valid coverage of their policies.
Travel insurers will direct customers to where compensation may be received for cancelled transport, holidays or an inability to travel abroad; and consider all valid travel insurance claims quickly and fairly for costs not recoverable from elsewhere.
They will also help customers consider their options for transferring their travel insurance to cover a new destination, and be understanding of the difficulties customers may have in getting medical certification.
Home insurers are being flexible on cover, given the requirements on people having to work from home and that this won’t invalidate their policy.
Motor insurers have relaxed policies around government advice advising against travel.