Due to complications in Business Interruption claims in the UK and US, KBRA has explained that insurers will expect to see more standardisation and clearer policy language when writing terms and conditions, post COVID-19 pandemic.
Reinsurance News recently hosted a webinar partnered with sister publication, Artemis and in association with our partner Kroll Bond Rating Agency (KBRA). The session explored both the traditional reinsurance and insurance-linked securities (ILS) market in 2021 throughout the COVID-19 global pandemic.
Last month in the UK, the court sided with policyholders in a landmark judgement that obligated UK re/insurers to honour BI claims connected to the pandemic.
In the webinar, Peter Giacone, Managing Director and Global Head of Insurance at KBRA spoke about an increased push for more standardisation in regards to policy language in terms and conditions.
“It was pointed out earlier, I think in Europe you’ve got a very different situation than you have in the US on the business interruption side. So, I think that’ll feed into terms and conditions.
“I think you will see an increased push for some more standardisation along that, to help alleviate that problem.”
The COVID-19 pandemic has certainly shown that it’s important that policy holders have full transparency of what is covered when taking out an insurance policy.
Pina Albo, Chief Executive Officer of Hamilton Group also commented on how T&C wording needs to be presented in a clearer way, so that policyholders know exactly what they’re covered for, and so that there’s no misconception.
She added: “We focus a lot on rate, but the other important aspect, perhaps not equally but more important, are terms and conditions. In the course of the soft market, wordings have been broadened, hours clauses get extended.
“What we’re now seeing, is in addition to the rates going the right way, people going back and looking at wording and saying, well hang on a second, let’s pare back this, let’s look again at the definition of loss, and that is also a very, very important aspect of what we’re seeing right now.”
