Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading Arch Insurance Launches Terrorism Insurance For SMEs. This week we’re bringing you: COVID-19 Claims Acceptance Lower Than Predicted
Insurance industry fights on to avoid paying out millions in Covid shutdown payouts*
The insurance industry is considering launching a second test case to try to avoid paying hundreds of millions of dollars to businesses forced to shut because of the coronavirus pandemic.
Insurers lost a test case on Wednesday in which the industry tried to knock out every claim for business interruption insurance lodged due to Covid-19.
Lawyers for businesses said insurers had advised customers that losses from the virus could not be claimed as the disease was a quarantinable one, under the Quarantine Act of 1908. However, the act was repealed in 2015 and the court said the carve-out did not apply to a similar clause in the law that replaced it, the Biosecurity Act.
The Insurance Council of Australia, which funded the original action, said it was considering funding a second case that would focus on different issues.
uch a case would test how many cases would be needed, and how close to a business, to count as an outbreak of an infectious disease and result in a payout.
It would also test whether government closure orders amount to “prevention of access” to business premises, which also triggers a payout.
The UK insurance industry recently lost a case brought by the Financial Conduct Authority dealing with similar issues, although there are differences between British and Australian law.
Separately, the ICA is also considering asking the high court to allow an appeal against the result of the first test case.
“The industry seeks to progress a court resolution of these matters quickly, and regardless of any decision around an appeal on the first test case,” it said.
Zywave’s ITC acquisition creates leading agency solutions provider*
The insurance technology space was shaken up in November when Zywave, Inc., a provider of cloud-based sales management, client delivery, content and analytics solutions for the insurance industry, announced that it had entered into a definitive agreement to acquire Insurance Technologies Corporation (ITC).
On November 30, ITC CEO Laird Rixford (pictured) and Zywave CEO Jason Liu came together during a LinkedIn webinar to provide further clarity on the deal and why the two firms make an ideal pair.
“The ITC team is excited to be joining forces with Zywave … to make sure that we are providing better support and service to our shared customers,” said Rixford. “Like Zywave, we offer solutions designed for the independent insurance agency market to help them drive business efficiencies and accelerate their growth.”
ITC provides everything from agency marketing services – including websites, marketing communication automation, search engine marketing, and custom content services to drive social media engagement – to agency management systems and a personal lines comparative rater, which automates the quoting process and enables users to receive multiple quotes instantly.
COVID-19 claims acceptance lower than predicted*
It has been more than eight months since the start of the COVID-19 pandemic in the U.S. and the impact on workers compensation claims continues to be less than predicted, experts say.
In much of the country, the number of COVID-19 workers comp claims accepted — even in the 17 states with a presumption law or executive order that allows workers to claim they contracted the virus at work — have not been particularly high or costly, they say.
Illinois, despite having a presumption law with one of the widest nets, hasn’t seen the big influx of claims that was anticipated, said Rich Lenkov, capital member and head of the workers compensation practice at Bryce Downey & Lenkov LLC in Chicago. He estimates that COVID-19 claims comprised less than 5% of the overall claims he’s seen in his practice this year.
“I represent a lot of companies that employ first responders, hospitals, and we’re seeing more (claims) than the average, but not to the degree a lot of us thought initially,” he said.
Health care employers are erring more on the side of accepting claims if it’s clear that an exposure occurred at work, he said. But most of his clients have tended to be “fairly skeptical” about whether the claims did arise out of and in the course of employment because of “the pervasiveness of the pandemic. There’s difficulty in pinpointing exactly where an employee might have been exposed. For the most part, we are disputing a relationship to work.”
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