ABI responds fully after powerful MP body ask questions over handling on coronavirus
Insurers are ready to lead a debate with the government over a Pandemic Re-type solution for the future - but stress it will mean ’significant state partnership’.
Speaking on behalf of insurers, ABI boss Huw Evans told the powerful Treasury Select Committee: ”We do, however, want to lead a debate with Government about how to protect more businesses and individuals than has been the case with Covid-19 which would require significant state partnership with the insurance sector if coverage is to increase.”
Evans was responding after the body raised a series of questions over insurers’ response to the Coronavirus crisis.
The select committee was particularly keen to learn about business interruption.
But Evans, wriring to select committee chair Mel Stride: ”It is important to note that no insurance market in the world provides widespread insurance coverage for pandemics and the UK is no exception.
”For such cover to be available at affordable prices for businesses would require a very significant subsidy from the State given the scale of business disruption we have seen with the Covid-19 pandemic.
”Only a very small minority of businesses will have chosen to buy any form of cover that includes local closure due to an infectious disease. An even smaller number will have cover enabling them to potentially claim on their insurance for the presence or impact of the Coronavirus pandemic.
”Instead, business insurance typically protects against day to day risks such as damage to premises, motor accidents, supplier failure and employee harm.
”Last year, in the UK alone, these types of everyday claims from businesses amounted to approximately £7.8bn whereas claims for notifiable diseases were negligible.
”Business interruption is not designed to provide cover for global pandemics and the size and scale of the government support packages and central bank interventions we have seen in recent days demonstrate the widespread impact on all aspects of the economy…”
Evans also detailed how insurers are helping in other areas including motor, health, home, travel.
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