Responding to the government’s announcement of a series of measures to help protect the economy from the full fall-out from coronavirus, Mactavish says insurers, too, should be supported by emergency measures to ensure they can still offer cover to businesses which are struggling financially.

Such measures could include temporarily suspending IPT; providing cheap loans to insurers to help support their cash flow and reserves; insurers temporarily freezing any increase in insurance rates; insurance renewals becoming automatic and loosened capital requirements for insurers. The firm said it could also explore ways to compensate insurers from any losses incurred from these measures.

Bruce Hepburn, CEO, Mactavish said: “The losses insurers have incurred on their investments in recent weeks could lead to them increasing the premiums they charge dramatically, insurers pulling out of sectors and classes of business, and an increase in claims being rejected along with payment of settlements being slowed down. All which will worsen an already severe expected recession.

“The government, insurers, brokers, business trade bodies and other relevant parties need to enter into a dialogue about possibly introducing a series of measures to address this issue and to ensure that insurers can continue to provide cover but at a rate clients can afford. Without insurance businesses cannot operate so it is the lifeblood of the economy.”

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