Lloyd’s is rumoured to be in discussions to set up a £100 million fund to tackle COVID-19, according to industry analysts.
The fund, which is said to have a goal of between £85 million to £100 million, comes at a time when the insurance industry is stepping up its response to COVID-19.
Having designated Coronavirus as a major claim and challenging the market to quantify their exposures from coronavirus, the move would signal Lloyd’s desire to tackle the claim head-on.
The move comes at a time when there are growing calls in the US for insurers to pay out on business interruption insurance, calls that were accelerated after President Trump’s remarks that insurers should pay out.
Yet, many industry bodies such as the American Property Casualty Insurance Association (APCIA) said that such a move was simply unaffordable. In a statement, the APCIA said that the “total surplus for all of the US. Home, auto and business insurers combined to pay all future losses is roughly only $800 billion, with the combined capital of the top business insurance underwriters representing only a fraction of that amount.”
Given that over half of Lloyd’s business emanates from the North America, this will an issue that will be monitored closely.
In more positive news, a side effect of coronavirus is that it has given rise to an increase in risks placed on the London Market’s electronic platform (Placing Platform Limited), with an increase of 55% to 5,600. User growth has increased substantially by 40% and new users are being trained on the platform.
While the issues surrounding the payment and legality of claims will continue to play out in the media and courts over the coming months, there are some positive signs, namely the growing use of technology. A lasting legacy of COVID-19 could be that the industry emerges as a more technology-literate industry, through its use of API tools such as PPL.