COVID-19 reinsurance claims are part of a wider negotiation

While clarity is emerging around COVID-related claims for insurers, it remains unclear what claims may end up hitting reinsurers. It could simply come down to a negotiation, Wendy Kriz of Barnett Waddingham told Intelligent Insurer.

The extent to which insurers will be able to aggregate COVID-19-related claims will have the biggest bearing on the extent to which they will claim on their reinsurance policies. But this may well be agreed behind closed doors as part of a wider negotiation process, as opposed to being settled in court.

This was one of the main points from an interview with Wendy Kriz, senior consulting actuary at professional services consultancy Barnett Waddingham, which discussed what claims reinsurers might expect as clarity starts to emerge around the extent to which insurers will need to pay out. The interview took place on Intelligent Insurer’s Re/insurance Lounge, an online platform where interviews and panel discussions are available on demand.

The UK Supreme Court in January upheld a judgment that ruled that insurers were in large part (with some nuance around policy wordings) liable to pay business interruption (BI) claims relating to COVID-19. That offered some clarity for insurers, but it remains unclear exactly how this will translate into claims for reinsurers.