Insurers offering help to those affected by coronavirus
Bobbi Sills examines how insurers have been supporting customers during the coronavirus pandemic
The Covid-19 crisis has rocked global financial markets. With thousands of people out of work and an economic recession on the horizon, insurers are now grappling with a surge in customer queries.
Both individuals and businesses have been hit by the knock-on effects of the pandemic and UK lockdown measures enforced in March, which suspended the functioning of businesses across the country.
But what are insurers doing to support customers who have been financially impacted?
In response to the outbreak, the Financial Conduct Authority (FCA) said: “We expect firms to consider very carefully the needs of their customers and show flexibility in their treatment of them.”
Britain’s financial regulator outlined a series of temporary measures to support customers who hold insurance and premium finance products and who have been financially impacted as a result of the coronavirus.
Firms have been expected to reassess the risk profile of customers who hold general and protection insurance policies to gauge whether there is scope to offer lower premiums, according to the FCA.
Mark Shephard, assistant director, head of general insurance within the policy directorate at the Association of British Insurers, says: “We have seen a whole range of areas where insurers have helped people to ensure that they continue to be covered.
“There has been flexibility around some of the terms and conditions stated in policies, with insurers recognising that people are facing extremely difficult circumstances and challenges where they are not currently able to meet them.”
Mr Shephard points out that many insurers are offering support on a case-by-case basis, either by having discussions with their customers directly or by going through a broker.
We have seen a whole range of areas where insurers have helped people to ensure that they continue to be covered
With fewer drivers on the road, more consumers have been looking to reduce their motor cover as well as save on premiums during the lockdown.
Insurers such as Admiral and LV= were quick to waive administration and cancellation fees, as well as offer partial refunds to policyholders who have not used their vehicles as a result of the pandemic.
Customers are also being given the option to update their policies to reflect current usage and potentially lower their premium by temporarily switching from a fully comprehensive policy to third-party fire and theft.
Mr Shephard’s view is shared by Kevin Hancock, chair of the Society of Insurance Broking, who says: “There are a few examples where insurers have been sympathetic during the course of renewal to ensure that they are reflecting the current and anticipated risk posed by the pandemic.”
Insurance giants Axa, Aviva and the AA have also committed to offering payment holidays to customers who have been hardest hit financially.
The payment holiday scheme gives drivers the option to freeze premiums and defer payments until a later period, but the full amount must be repaid before the policy ends.
Home insurance customers who have experienced a significant fall in income or seen their usual salary stop completely as a result of the crisis are also eligible for the scheme.
Mr Shephard says: “Motor and home insurers understand that this is an incredibly difficult time for British families and businesses.
“These public pledges reinforce insurers’ determination to do everything possible to help their customers in these challenging times.”
There has been a lot of flexibility shown by insurers for people who are having to adapt to the unprecedented circumstances they find themselves in
Supporting those on the front line is right on the radar for motor insurers such as Aviva and Admiral, which upgraded car cover free of charge for key workers who need to transport patients, groceries and medicine.
Admiral also said it was waiving any motoring claims excess fees for NHS or emergency service workers and providing a free courtesy vehicle if their vehicle is damaged or stolen.
Mr Shephard says: “There has been a lot of flexibility shown by insurers for people who are having to adapt to the unprecedented circumstances they find themselves in.
“We have seen that right across the board, from support offered to volunteers who are using their cars to get people groceries, to NHS workers who need to use their vehicle for a different purpose to what is stated in their policy.”
As well as offering practical support, Aviva donated £5m to NHS Charities Together and £10m to British Red Cross as part of a pledge to support the wider community during the crisis.
Colm Holmes, global CEO, general insurance at Aviva plc, says: “We are seeing extraordinary efforts, particularly from NHS workers who are on the front line helping to keep us safe in the global fight against Covid-19.
“The funding for NHS Charities Together will help provide vital support to NHS workers, patients and communities, and ensure that support reaches more people, quickly.”
As the UK takes its first steps toward a return to new ways of working, the spotlight is on the insurance and financial services professions to see how well they can continue to adapt to provide crucial support to consumers.
Bobbi Sills is communications executive of the CII
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