LONDON:
Business interruption insurance is not designed for pandemics, and if Britain wants businesses to have more cover in future for such events, it would require state aid, the Association of British Insurers said on Friday.
Britain’s lawmakers have piled pressure on insurers to show flexibility to businesses and customers making claims during the coronavirus pandemic that has shut down most of the economy.
Britain’s Treasury Select Committee of lawmakers on Thursday asked the ABI for a detailed list of data to check insurers are treating customers fairly.
“No insurance market in the world provides widespread insurance coverage for pandemics and the UK is no exception,” the ABI said in response.
“For such cover to be available at affordable prices for businesses would require a very significant subsidy from the state.”
Lawmakers in other countries have been putting similar pressure on insurers, who exclude epidemics and pandemics from standard business interruption policies.
French insurance lobby FFA said this week its members would contribute up to 200 million euros ($221.50 million) to funds set up by the government to help companies deal with a significant drop in activity due to the coronavirus crisis.
Eighteen U.S. lawmakers wrote to four trade groups this week asking the industry to “recognize financial loss due to COVID-19,” the disease caused by the new coronavirus, as part of customers’ coverage for business interruption.
UK travel insurers will pay out a record 275 million pounds ($341.30 million) in coronavirus claims, the ABI added in its response to the committee.
It also said insurers were waiving requirements for extra motor insurance for people taking medicines or groceries to those affected by coronavirus, and for extra home insurance for office workers who needed to work from home.
It said it was working with the British government on any potential impact for private medical insurance customers.
Britain’s National Health Service (NHS) has struck a deal with the independent hospital sector for extra ventilators, beds and healthcare staff to fight coronavirus.