FERMA calls for flexibility and partnership among brokers and insurers

The Federation of European Risk Management Associations has urged insurers to grant customers flexibility as they work through the coronavirus pandemic, and begin to plan for recovery.

The European risk management body further voiced its concern around the imposition of retrospective changes to coverage, flagging the risks to contract certainty and trust.

FERMA president, Dirk Wegener said: “Many companies are under great pressure as a result of the pandemic. We need brokers and insurers to work with us as partners at this difficult time. For some businesses, it may be a question of survival.”

“It is essential that we have continuing access to insurance and that we are kept well informed. We also need insurers to exercise flexibility when reasonable and practical. This applies both to timing and extent of premium payments and claims negotiations. We welcome the support that insurers have put in place so far.”

Wegener acknowledged that insurers are also under stress. “EIOPA states that imposing retroactive coverage of claims that was not envisaged within contracts could create material solvency risks for insurers. We agree. Forced retrospective changes would jeopardize contract certainty and not help build a sustainable and trusted relationship. A healthy insurance industry will be, among other things, essential for business in recovering from the pandemic.

FERMA also voiced its support for the creation of national pools to cover future pandemic risks.

Said Wegener: “National pools have been useful in responding to other severe and widespread risks, such as terrorism. We believe they can be so now. We encourage the European Union to support such developments and ask EIOPA to make proposals. FERMA remains available to provide an expert view from risk and insurance managers.”

Photograph of Dirk Wegener courtesy Audrey de Leval

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