Earlier today, Chubb CEO Evan Greenberg addressed business interruption in his opening remarks at the company’s second quarter earnings call.
Greenberg reiterated the uninsurable nature of pandemics and the necessity for the federal government to take the lead in mitigating pandemic risks. To properly service all policyholders, Greenberg said, the insurance industry must not be distracted by attacks from the legal community.
Some other highlights from Greenberg:
- Trial attorneys are using business interruption (BI) claims to attack the insurance industry for their own profit. The trial bar represents “many businesses which purchased BI coverage that does not provide cover for pandemic, and these customers are understandably disappointed and upset. Plaintiff attorneys are attempting to torture or reverse engineer insurance contract language to conjure up business interruption coverage that for the most part simply doesn’t exist.”
- Standard BI premiums are not designed to cover the enormous and uninsurable risk associated with pandemics. “State insurance regulators, who approve the policies, have been clear that this risk is not covered and that the industry could not cover the massive open-ended tail risk of a global pandemic because it threatens the industry’s solvency. Without the federal government playing a major role to cover the tail risk, pandemics are simply uninsurable on a broad basis.”
- Forcing the insurance industry to pay BI coverage would jeopardize the industry’s ability to respond to legitimate claims and support all policyholders. “It would be wrong – in fact, catastrophic and irresponsible – to pay the claims of those who didn’t have coverage, and in fact didn’t pay premiums for the coverage, by using funds that have been properly reserved for the legitimate claims of the vast majority of our P&C policyholders who number over 100 million globally.”
You can read more about Greenberg’s remarks in Business Insurance’s summary of the Chubb earnings call.
For more information and resources, go to fairinsure.org.