Specialist re/insurer Hiscox is expecting to pay up to $150 million in net claims, should disruption caused by restrictions on travel and mass gatherings continues for a six month period from March.
In the event that these coronavirus-related restrictions are extended beyond six months, Hiscox expects that these claims could increase by an additional $25 million.
Hiscox says it is also receiving claims as a result of economic losses following government action to stop the spread of COVID-19.
Like others in the industry, Hiscox UK’s core small commercial package policies do not provide cover for business interruption as a result of the general measures taken by the UK government in response to a pandemic.
Hiscox believes its business interruption exposure to COVID-19 is limited in Hiscox Europe and it has negligible exposure in Hiscox USA.
Hiscox UK and Hiscox Europe have a substantial catastrophe reinsurance program.
Hiscox notes that its capital, liquidity and funding positions remain robust and the Group remains operationally strong in the face of unprecedented global uncertainty presented by the COVID-19 pandemic.
However, Hiscox expects this uncertainty and consequent capital contraction to influence rates across wholesale and reinsurance markets.