Federation of European Risk Management Associations (FERMA) President Dirk Wegener has called on insurers and brokers to work together to ensure companies survive the ongoing coronavirus pandemic.
Wegener noted that for some companies this cooperation could be a question of survival.
FERMA believes that insurers should grant flexibility to business customers, as well individual consumers and is concerned that the imposition of retrospective changes to insurance coverage would create a breach of contract certainty and not help build a relationship of trust.
The association also supports the creation of national pools to cover future pandemic risks and has welcomed a strong statement from the European insurance regulatory agency EIOPA to insurers and intermediaries, which urges the industry to treat consumers fairly and exercise flexibility in how they are treated.
“The message is for businesses, too,” said Wegener. “It is essential that we have continuing access to insurance and that we are kept well informed.
“We also need insurers to exercise flexibility when reasonable and practical. This applies both to timing and extent of premium payments and claims negotiations. We welcome the support that insurers have put in place so far.”
Wegener acknowledged that insurers are also under stress, noting that EIOPA states that imposing retroactive coverage of claims that was not envisaged within contracts could create material solvency risks for insurers.
“We agree. Forced retrospective changes would jeopardize contract certainty and not help build a sustainable and trusted relationship. A healthy insurance industry will be, among other things, essential for business in recovering from the pandemic.”
FERMA also urges the European Union to support the creation of national insurance pools for future pandemic risks, with Wegener stating, “National pools have been useful in responding to other severe and widespread risks, such as terrorism.
“We believe they can be so now. We encourage the European Union to support such developments and ask EIOPA to make proposals. FERMA remains available to provide an expert view from risk and insurance managers.”
