Reinsurance News

BI dispute has hurt industry reputation: Markel’s Richie Whitt

10th November 2020 - Author: Matt Sheehan

Richie Whitt, Co-CEO of Markel, has warned that the re/insurance industry’s response to the dispute around COVID-19 business interruption (BI) claims may have a long-term negative impact on its reputation.

Speaking with Andy Marcell, CEO of Reinsurance Solutions at Aon, as part of the broker’s series of virtual ‘fireside chats’, Whitt confronted the issue of insurance branding amid the fallout from the pandemic.

“It hasn’t been good for the industry in terms of our reputation, unfortunately. We’re going to pay billions and billions and billions in losses as a result of COVID, but unfortunately I think most people are going to remember the losses we don’t believe we should have to pay, which is the business interruption in most cases,” he told Marcell.

The overall cost of the COVID-19 crisis remains difficult for re/insurers to quantify due to its ongoing nature and the prospect of further lockdown measures around the globe, Whitt noted.

And this dynamic is compounded by the legal and judicial challenges surrounding issues like business interruption, which will ultimately decide how coverage is interpreted.


“That adds an unknown to it,” said Whitt. “So, we are trying to be conservative, like we try to always be, more likely redundant than deficient as we think about the reserves.”

“But, I’ve been very careful to warn our shareholders and stakeholders that I think there’s more potential variability around the outcome on COVID losses than any other loss I’ve seen in my career,” he went on.

“So, I think we need to be humble, in terms of our ability to predict exactly where this is going to end up.”

Undoubtedly, the re/insurance industry will lose many billion as a result of the pandemic, but a cost that is potentially no less serious could be a loss of faith in the industry by consumers, Whitt warns.

“I don’t think we do a great job of telling our story and the benefits and values we add as an industry, and yet again, I’m not sure our PR is the best at the moment,” he told Marcell.

“Because, again, while we’re going to be paying billions and billions in losses I think most people are focused on the ones we as an industry, for the most part, don’t believe are owed.”

On this point, Whitt says the industry has an “educational issue” to tackle in that the average policyholder probably believes their insurance covers a lot more than the actual legal terms allow for.

“If we’re taking the position certain things are not covered, there is true coverage gaps where risk is falling between the cracks and unfortunate situations resolved,” he said.

“You can argue about how much of that gap can be closed, but as long as that gap is significant, I think the insurance industry is missing an opportunity and we’re also setting ourselves up for criticism. When things fall in that crack.”

Print Friendly, PDF & Email

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous post:
TMK updates Lloyd’s syndicate forecasts for 2018 and 2019

Tokio Marine Kiln (TMK) Syndicates Limited has announced the latest forecasts for the 2018 and 2019 years of account for...