May 2020 Insurance News Round-Up

The insurance industry, like many others, has been facing unprecedented new challenges thanks to the impact of coronavirus. Below, we take a look at some of the latest news affecting the industry.

Axa court case

Earlier this month, insurance giant Axa lost a court case against a French restaurateur after failing to pay out on the restaurant’s business interruption insurance policy. The company has now stated it will pay the majority of business interruption claims made by restaurant owners in France. 

The dining industry is one of the hardest hit industries by COVID-19. And with many restaurants forced to close their doors completely, it is unsurprising that many are looking to claim on their policies to recoup some of their operational losses.  

It is expected that this case will set a precedent for similar actions in the UK. 

Read the full story at Insurance Times.

Axa isn’t the only insurer that has been criticised for not paying out during the crisis. Others, including Hiscox have been subject to scrutiny for rejecting claims. As a result, surveys have warned that SMEs may be less likely to invest in business interruption insurance policies in future. 

Growth in cycling insurance queries

Following the recent lockdown restrictions and the government’s advice to avoid public transport where possible, more people have taken up cycling, either as a means of commuting or for daily exercise. As a result, there has been a surge in online queries for cycling insurance. Many businesses are encouraging their employees to walk or cycle where possible, with cycle to work schemes growing in popularity over the past few years. 

With an increase in cycling, more people will be looking to insure their bikes against theft or damage. Admiral reported a 46% increase in bicycle theft claims since lockdown. 

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Wimbledon payout

The organisers of Wimbledon are set to receive a huge payout from their insurers having taken out pandemic insurance well before the crisis struck. Following the SARS outbreak, in 2003, Wimbledon took out pandemic insurance. 

Like many other big sporting events this year (including the Tokyo 2020 Olympics and the Premier League), Wimbledon has made the decision to cancel its world famous tennis championships. The All England Lawn Tennis Club (AELTC) are one of the few sporting events organisers to be adequately prepared for the pandemic. Over the past 17 years, the club has paid out over £25m in pandemic insurance and is set to recover roughly £114m for this year’s event.   

While a staggering sum, this amount won’t cover the club’s full loss of income, which is estimated at over £265m. 

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Uptick in insurance policies

According to research from a multinational consultancy firm, there has been a significant increase in the number of consumers looking to purchase insurance since the start of the pandemic. Studies saw a 10 percentage point increase, suggesting that more people are realising the importance of being prepared, should the worst happen. The report by Capgemini Research Institute, titled ‘COVID-19 and the financial services consumer’, urges insurers to offer better digital services and more bespoke packages to help clients better manage risk. 

You can read the report on Capgemini’s website. 

Similarly, technology company FIS reported an expectation that the insurance industry will grow in demand, with more businesses looking for pandemic coverage. 

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