Insurance bosses want to meet govt to discuss crisis response

Brokers Ireland has today called on the government to convene a meeting of insurance company CEOs to explore an industry-wide response to the Covid-19 crisis.  

Cathie Shannon, Director of General Insurance at the organisation which represents 1,250 Broker firms, said while many businesses will have Business Interruption insurance the wording on policies can vary. An effort should be made to bring clarity to the situation for policyholders and to explore all possible means to address the unprecedented situation that many people, particularly businesses, now find themselves in.

She called on insurance companies to be flexible in particular in relation to coverage for business costs and losses arising from the virus and to explore options for ensuring that their clients do not go out of business permanently as a result of being forced to close.

“While businesses forced to close as a result of the pandemic may not have specific cover for such, some will have clauses that in certain circumstances may cover notifiable human infectious or contagious disease, which may be contingent upon a Government decision to close,” she said.

“We would encourage insurance companies to be flexible around coverage decisions taken, particularly given that businesses are being responsible in doing the right thing to protect consumers and staff, and also those businesses that are forced to close without such a Government declaration because business had all but dried up,” she said.

She called on insurers to be flexible as regards periods of business closure, in terms of the policy terms and conditions imposed and the premium payments expected from their policyholders during this time and to explore all means whereby this unprecedented situation may be addressed.

Ms Shannon welcomed the meeting between the Minister for Finance and the banks. However, she said the “devil would be in the detail.”

“The payment break of up to three months and the provision of working capital support to support businesses and personal customers is a very welcome step.  However, if the measures still allow lenders the option of charging interest payments in respect of the period it would be deeply disappointing.

“If consumers and businesses are devoid of income in this extraordinary and unprecedented situation then it would be unreasonable to expect them to pay interest for the period. 

“If decisions on this aspect rest with the individual customer and his/her bank then it would be very unsatisfactory and go against the spirit of solidarity the Government is urging.    If this is the scenario we would suggest the Government should negotiate further and attempt to ensure that interest payments in respect of the break period are not added on at a later point,” she said.

Ms Shannon also said that loans are not an answer because they will simply pile up debt, unsustainable in very many instances, particularly if the current situation is prolonged beyond a few weeks, as appears likely.

“The Government should now consider exploring with Insurance Company CEOs how the insurance companies can take the lead in demonstrating corporate social responsibility during this unprecedented crisis”, she said.