While COVID-19's impact on the insurance industry will require time to fully understand, litigation, legislation and pricing and policy language concerns will be with us for a long time to come.
"Significant" changes in the policy language seen
The majority of respondents in a market survey on Artemis reinsurance believe that the COVID-19 pandemic will lead to "significant changes" in business disruption (BI) policy formulations.
In fact, the British Financial Conduct Authority (FCA) is conducting a review focusing on obtaining legal clarity in policies related to the pandemic and which claims are valid and which are not.
FCA Interim Manager Chris Woolard recently said that while some BI policies pay for virus-related problems, others remain "in dispute" due to ambiguities in their wording.
Outside of the 67.6% who expressed a belief that COVID-19 will drive "significant changes" in BI policy formulations, 21.6% expect a "moderate mounting" of change, while the remaining 10.8% said the effect will be "limited."
Loss calculations vary
The Artemis survey also shows that 67% of respondents expect the industry to face between $ 80 billion and $ 100 billion in guarantee losses due to the pandemic. This is roughly in line with Lloyd's from London's previous estimate of the global industry's impact of $ 107 billion.
But investment bank analysts Berenberg said they believe global COVID-19 claims will be more manageable and calculate a range from $ 50 billion to $ 70 billion for the total bill The analysts do not state whether this includes both life and non-life insurance claims from the pandemic, but they point to the estimate from Lloyd & # 39; s of London that too high.
"We estimate $ 50-70 billion for global COVID-19 claims," Berenberg analysts said. "Significantly less than the $ 107 billion reported by the market estimate of Lloyd & # 39; s of London on May 14."  Las Vegas Hospitality Union Sues Employers
Las Vegas Culinary Workers Union Local 226 sues several employers on the Las Vegas Strip over unsafe working conditions during the coronavirus pandemic, Business Insurance reported. ] The union, which represents 60,000 workers, said in a statement that it calls for sanction relief under Labor-Management Relations Action based on the "dangerous working conditions" workers face.
The lawsuit claims that casino services have not protected workers, their families and their society from the spread of COVID-19 and that the current rules and procedures for responding to workers contracting COVID-19 have been "completely Culinary Union made a number of policy changes requests, including daily room cleaning, mandatory tea cleaning by all COVID-19 employees before returning to work and then periodically testing, adequate personal protective equipment for workers, and a requirements that guests wear face masks in all public areas.
Best Warning for COVID-19 Workers & # 39; Comp Laws
Insurance Rating Institute AM Best has warned against legal efforts in several US states to increase workers' compensation coverage to enable employees applying for COVID-19 will have a negative impact on reinsurance companies. Reinsurance News reports.
The crisis has resulted in many employees now working from home, but a significant portion of the workforce must still be present and public, and this is the group that new state laws aim to support. For these workers, some states are seeking to shift the burden to the insurer to prove that an employee who employs COVID-19 did not while he was at work.
"This shift in the burden of proof can lead to significant additional losses to a segment that is already under pressure and results in increased reserve calculations and higher combined quotas," AM Best said.
Given that assumptions used in pricing and actual loss growth differ significantly, these legislative changes will result in an increase in loss calculations and may affect profits.
Companies ask protectors to waive the right to sue
When companies reopen in the US after a coronavirus stop, many require customers and workers to sign forms saying they will not sue if they catch COVID-19, the Associated Press reported.
Companies are afraid that they could become litigation cases, even if they follow security measures from the Centers for Disease Control and Prevention and state health officials. But workers' rights groups say that the forms force employees to write off their rights should they become ill.
To date, at least six states – Utah, North Carolina, Louisiana, Oklahoma, Arkansas and Alabama – have such boundaries through legislation or executive orders and others are considering them. Business groups like the US Chamber of Commerce lobby for national accountability.