We have not yet had any meaningful response from either insurers or loss adjusters on behalf of the insurers. However, that is not to say that things have not been happening in the high echelons of the insurance world.
The Bank of England have announced some interesting forecasts.
- a drop in growth this quarter of 28%.
- An increase in unemployment of 9%
- A drop in consumer spending of 12.5%
They have identified that
- Whilst the economy is technically strong, the biggest issue is cash-flow
- GDP is likely to drop 14% this year – but increase 15% next year
- Inflation is likely to remain at 0.5/0.6% – largely driven by oil prices
This information brings pressure to bear on the government – who clearly wants businesses to remain viable so that they may return to ‘normal’ trading as soon as possible. The insurance companies are one source of financial assistance and I think we are beginning to see signs of some pressure being placed upon the insurers.
The Financial Conduct Authority (FCA) are continuing with their plans to refer the matter to the courts. They have made clear their thoughts that those insurers who have provided some cover within the policies should cease prevaricating about claims settlement. Although we have not yet seen any formal response to this, it is reported that some of the key insurers are rescheduling their finances: one hopes so that they can meet their liabilities.
It is generally accepted that some policies offer no cover for COVID-19 claims. However, the terms of some of these policies are now being contested. So perhaps, “things they are a-changing”.
The claims team at BGi.uk recently attended a webinar delivered by 3PB Barristers. Whilst this repeated a good deal of what we already know, it was particularly useful as it gave us an overview of the claims activity in the market beyond or own ‘client bubble’. Generally speaking, we feel that insurers are slowly climbing off their proverbial fences and will be moving forwards sooner rather than later.
The FCA seem to be encouraging the insurers to act in a consistent manner across the market – so that all policy holders are treated equally. However, in my mind this creates a potential threat of collusion and their being charged with establishing a cartel. One to watch.
Finally, there has been an ‘open letter’ sent to the Association of British Insurers. This is reproduced here and you may, of course, write something similar. We will continue talking to the Legal Representatives with a view to providing some more definitive updates next week.