Protector Forsikring loses case that Munich Re should pick up most of Grenfell cost through reinsurance programme
Grenfell Tower insurer Protector Forsikring is set to pay out £6.9m after losing an arbitration case relating to the tragic June 2017 fire.
Norwegian insurer Protector provided property and liability cover for the Royal Borough of Kensington and Chelsea (RBKC), including Grenfell Tower, but had expected Munich Re to pick up much of the cost of the fire through a reinsurance programme.
However, an arbitration panel decided against Protector’s view.
In a filing on the Oslo Stock Exchange, Protector said: “The panel decided against Protector’s understanding of how the reinsurance contract covers the financial property loss following the tragic fire in Grenfell Tower.”
It went on to warn that the company had not booked any reserves for this outcome in previous quarters, and that its Q2 results will now include a loss of £6.9m. The panel did not award legal costs.
“The conclusion from the arbitration panel is surprising to Protector, but cannot be appealed,” Protector said in the filing. “The result will not have any further consequence on Protector’s reinsurance accounts.
“There are no reinsurance exposures with the same structure as RBKC and Grenfell Tower, and future losses are covered on a different basis where the issues in dispute are not relevant.
“It is unfortunate that this dispute has generated additional negative attention to the terrible human tragedy of Grenfell Tower.
“Protector has a firm commitment to handle the remaining process of the Grenfell Tower claim with integrity and quality. The company also remains committed to the long-term plans for the UK operations.
“Our client, Royal Borough of Kensington and Chelsea, was not party to the reinsurance dispute and the outcome will not affect the handling of the losses with the borough.”
Protector said that it had relied on advice from its broker and would discuss the loss with them.
The panel stated that dispute had been complex and that there were good reasons for bringing the matter to arbitration.