In a call with media this morning, Ardonagh’s chief executive David Ross spoke about how an industry working group was ’on the cusp’ of finalising a solution for business interruption claims, but the FCA Supreme Court case put a stop to this
A coalition of brokers and Hiscox were “on the cusp” of a solution for the payment Covid-19 business interruption claims arising when the FCA’s test case hit, Ardonagh’s chief executive David Ross said today.
The industry initiative aimed to recreate the way that the sector came together in 2001 to figure out how to approach and pay claims resulting from 9/11.
Rob Worrell, chief executive of Ardonagh Advisory set up a Coalition of brokers, this working group included Hyperion, Willis Towers Watson, Aon, Gallagher and Marsh .
“We created a framework with Hiscox that the broker community was ready to sit with in front of the client and say: ‘you get this percent’,” Ross said during a media briefing call this morning alongside delivering the broker’s full year results for the year ending 31 December 2020.
The coalition then reached out to various other markets to get involved and received a series of warm responses.
He continued: “The disappointing thing for me is that this is one of the most complicated claims that has probably ever hit the insurance industry and we were on the cusp of solving it in a collaborative and incredibly compassionate way showcasing the best of the industry – and Hiscox were at the heart of driving that solution.
“I feel angry for the industry, I feel really angry for Hiscox because they were very good at educating us on the complexity and the enormity of trying to adjudicate what is a valid claim and what is not.”
On the cusp
“When the claim was brought in front of the court, we actually had our legs cut off and we were unable to solve the problem,” Ross said referring to the FCA’s business interruption test case brought on behalf of policyholders.
”Our solution ended up evaporating and we had to disband the working group. We were two weeks away from solving the problem,” he continued. “It was a really unfortunate missed opportunity, if we had actually finished the project it would have been one of the high points of last year.”
Ardonagh created a framework with Hiscox that the broker community was ready to sit with, in front of the client and say: ‘you get this percent’,” Ross added.
“I feel desperately sorry for Hiscox because of the way this whole thing has been portrayed, because Bronek [Masojada, Hiscox’s chief executive] gave his entire executive team the mandate to engage with us. We were leading the charge with the broking industry to basically recreate what happened on the back of 9/11, he said
“At no point did Hiscox ever say ‘we won’t pay,” he continued stressing that the firm admitted that it was a complicated problem and that they did want to solve it.”
Speaking of the reputational hit to the sector, he continued: “I feel angry for the industry, I feel really angry for Hiscox because they were very good at educating us on the complexity and the enormity of trying to adjudicate what is a valid claim and what is not.”
In the end, the FCA test case’s solution ended up being ”exactly the same solution that we had on the table” he said.
Lastly, Ross added: “What I love about our industry is that we’ll compete against each other during the day but when there’s a crisis we’re capable of getting in a room and actually solving the problem.”
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