Insurance Europe would like to express its sympathy to all those affected by COVID-19 and to thank those risking their own health to save lives.

Insurance Europe and its members are fully committed to ensuring that the European insurance sector continues to serve its customers and support European economic activities to the best of its abilities within the limits imposed by public authorities. Europe’s insurers have business continuity plans in place that enable them to continue to operate during this challenging period.

Please check back here for updates.

What is Insurance Europe doing in relation to the COVID-19 pandemic?

Insurance Europe is working on three fronts:

  • Identifying challenges emerging across markets — The federation is working closely with its member associations in the national markets to identify developments that affect insurers and their clients, and to identify areas in which coordinated action by national authorities may be needed at European level.
  • Liaising with the European supervisory authority — Insurance Europe is liaising closely with EIOPA to ensure there is a clear understanding of both developments in the markets and responses coming from supervisors.
  • Sharing best practice — Insurance Europe is providing a platform for its member associations to raise issues and share solutions to the unprecedented challenges faced by the industry.
How are Europe’s insurers responding to the pandemic?

European insurers remain committed to honouring their promises to customers and have implemented contingency plans to protect their customers and employees while minimising service interruptions.

At the same time, they are also voluntarily offering a range of exceptional measures to help alleviate the difficulties that businesses — particularly SMEs — and individuals are facing.

Here are just four examples, but there are many more:

  • maintaining benefits for those temporarily unemployed
  • extending cover for businesses whose employees are having to work from home
  • offering flexibility to motor insurance customers who have been unable to arrange the required technical checks on their vehicles
  • deferring some premium payments

Insurance associations and companies are also taking part in a variety of voluntary goodwill initiatives. These range from contributing financially to health and research initiatives to amplifying government mental and physical health messages.

What is the role of policymakers?

The insurance industry brings significant value to society through the wide range of risks it covers, paying an average of €2.9bn every day in claims and benefits to its customers. Policymakers should avoid imposing measures that could threaten the financial stability of the insurance industry or limit insurers’ ability to pay those claims and benefits.

For example, the European insurance industry warns against measures that would require insurers to retroactively pay claims that are not covered under existing policies. Insurers’ duty is to pay the legitimate claims contracted with their existing policyholders in all business lines. Retroactively requiring insurers to pay for losses for which they have not reserved could jeopardise both their ability to pay legitimate claims and the financial stability of the entire sector.

Why don’t standard policies cover pandemic risk?

As the scale of the COVID-19 pandemic has shown, widespread cover for the effects of pandemics is simply too great a cost for the insurance market to support. A pandemic, by definition, leads to claims from almost all businesses and individuals at the same time. The insurance model of pooling the claims of the few to be shared by the many simply does not work in such a situation.

Standard policies typically provide protection against risks that cannot all happen at the same time, as these can be offered at prices that customers can afford.

Why can’t insurers offer pandemic insurance now?

Insurance transfers the risk of specified but unpredictable events. It provides peace of mind for something that might happen. It cannot cover something that is already happening.

What about the next pandemic?

Once the pandemic is over, we need to start thinking about new solutions. As the scale of the COVID-19 pandemic has shown, such events require the joint involvement of the insurance sector and of the state. The industry has already joined forces with governments to develop workable and affordable solutions for other huge and difficult to insure risks, such as those created by flooding, terrorism and earthquakes. The European insurance industry therefore stands ready to discuss with policymakers how to better protect Europe against the risk of future pandemics.

As an insurance customer, where can I get more information?

Circumstances can differ between EU countries — and between companies within each national market — in terms of the types of insurance policies offered and the wordings of those policies.

Insurance Europe’s member associations are providing advice and guidance for customers in their national markets. You can find the contact details for all of them in the “About us” section of our website.

If you are unsure about what your policy covers you for, then please check directly with your insurer or insurance intermediary.

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