by Duffie Osental 11 Jul 2020
Most claims in Australia stemming from the
COVID-19 pandemic will be long tail claims, according to a new report.
Insurance law firm network Global Insurance Law
Connect recently released a new report that revealed the impact of the COVID-19
pandemic on insurers around the world, with law firm Sparke Helmore providing
commentary for Australia.
“Even as 2020 began, few of us imagined that the
world was about to face one of the largest pandemics in history, changing the
way we live and the economies our businesses operate in,” said Jim Sherwood,
chairman of Global Insurance Law Connect. “As events unfold, COVID-19 has also
changed the priorities for insurers in the short term. We are seeing similar
issues raised around the globe, but always reflecting differing local cultural,
political and geographical challenges.”
According to the report, while many of
Australia’s insurers have acted immediately to respond to the “financial
devastation” caused by the COVID-19 pandemic –
including adopting measures such as placing moratoriums
on instalment arrangements and deferring premium payments – the impact
on “all classes of businesses” will likely have a ripple effect throughout the
industry.
“In Australia, we are seeing COVID-19 have a
significant impact across multiple lines of cover,” said Catherine Power,
national practice group leader for commercial insurance at Sparke Helmore. “The
obvious impacts have been seen in the travel, life, health, event cancellation
and business interruption classes. But we are also seeing impacts across
liability, defence costs, financial lines, and D&O classes. We think the
majority of claims will be long tail claims, both in this pandemic phase but
also when the recovery begins.”
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