Global insurer QBE has expanded its provisions by $240 million for losses during the coronavirus pandemic, following a defeat in the UK court, media reports said. According to the insurer, it seeks to increase the provisions of its allowance to $785 million as a result of the pandemic. This points to an increase from $600 million.
It is reported that the insurer’s share price dropped more than 5 percent. The drop was after it added 185 million risk margin for Australian business interruption claims.
ICA spokeswoman told the media “While the insurance industry is sympathetic to businesses, particularly small and medium enterprises, that have experienced hardship as a result of Covid-19 restrictions, it remains of the view that pandemics were not contemplated for coverage under most business interruption policies and that the Quarantine Act exclusion excludes Covid-19 related claims.”
In Australia, the insurer has coped with an extra hit of up to $240 million. This is again following the UK court’s ruling which was not in favour of its business interruption policies. Last year, the insurance industry found that the bulk of business interruption policies had included ‘pandemic inclusions’, media reports said.
Small businesses in the UK won the right to insurance payouts following the country’s highest court ruled several policies that should cover losses caused by the pandemic, media reports said. Six of the world’s largest commercial insurers Hiscox, RSA, QBE, Argenta, Arch and MS Amlin have said that business interruption policies typically do not cover widespread disruption.