Analysis

Broker schemes susceptible to Covid claims fallout

By 2020-07-20T12:36:00

face masks

Although broker scheme policy wordings are typically the result of broker and insurer collaboration, industry voices believe schemes could be ‘possibly more exposed’ to Covid-19-related BI claims ‘purely because some of the wordings may not have received the usual insurer level of scrutiny’

Broker schemes have come under fire for ramping up insurers’ exposure to Covid-19 through the use of broader and less clear-cut language within policy wordings, leading to an increased frequency of claims payouts for business interruption (BI) non-damage extensions.

However, Peter Blanc, group chief executive at Aston Lark, said: “I don’t think any broker set out to try and bankrupt their insurance partners.”

He described the “accidental inclusion of cover” within broker schemes and the resulting claims fallout surrounding BI policies as a “really, really unfortunate set of circumstances” – although he does add that broker schemes are “possibly more exposed purely because some of the wordings may not have received the usual insurer level of scrutiny”.

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