LMForums COVID-19 & Claims Roundtable

We were pleased to have the support of US Law Firm, Freeborn & Peters LLP and Satellite Mapping and Drone specialists, Geospatial-Insight.

The session started with an overview by Freeborn of the trends and activities in the USA giving rise to insurance and reinsurance COVID claims, and an overview of how each State is treating such losses, including the introduction of legislation requiring insurers to pay COVID claims regardless of coverage defences and the concern that such laws would apply retroactively and not just to new policies. It remains to be seen about the long-term implications for the London Market on decisions taken by States. Joe McCullough, Senior Partner at Freeborn, ran through some of the reinsurance implications and trends, relating to COVID-19 claims. He reported that the impact is likely to be significant and long lasting.

Our second guest speaker was from Geospatial and gave us a insight into how the latest drone and satellite mapping technology is helping carriers and adjusters access and assess losses around the world that would previously have required a physical human line of sight, which is almost impossible in some areas due to the pandemic and quarantine policies in place. This technology can be very useful for deterring one of the main characteristics of “damage” - the trigger under most BI policies for a claim, as satellite imagery can confirm, beyond doubt a “changed physical state” prior and post the reported incident.

Key findings from our delegate polling, breakout rooms and Roundtable:

• 70% of delegates reported a large number of COVID-19 related notifications or claims but said that they were managing well.
• Almost half of those at the Roundtable expected a large influx of new COVID-19 claims over the next 12 months, whereas the other half thought that was unlikely.
• There was an initial peak of COVID-19 related claims notifications but now this has levelled off.
• 60% of delegates said that they were proceeding to adjust COVID-19 claims in the normal way whereas 30% were adopting a “wait and see” approach pending the determination by the UK courts, at the request of the FCA.
• Most participants did not anticipate a deluge of new COVID-19 related claims/notifications unless a second wave results in new lockdowns.
• There was concern that although we were managing the claims volumes at the moment, a heavy “hurricane season” might be real pressure on some claims functions.
• Certain brokers were reporting an increased number of declinatures by carriers of COVID-19 claims.
• Freeborn commented that both primary insurers and reinsurers need to be pro-active in their management and notification of these COVID-19 claims. COVID-19 claims are already motivating insurance companies to search for loss portfolio transfer deals in the “Legacy Market”, with more such deals to be on offer in years to come.
• The application of legislation retrospectively to force insurers to pay COVID-19 losses regardless of coverage defences is of real concern to the insurance community - it creates uncertainty.
• Almost half of the delegates said that technology, including new tools and services, such as drone inspections and satellite mapping, were starting to have a real and positive impact on the way claims are adjusted and the services we offer our clients.