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Law360, London (April 22, 2020, 3:25 PM BST ) Insurers Hiscox and Beazley expect to pay out up to $175 million and $170 million respectively on COVID-19 claims based on what is known so far, mostly on events canceled as a result of the pandemic, according to estimates issued Wednesday.
The companies gave an early indication in separate stock market updates of the scale of potential losses that could affect the wider insurance sector.
Hiscox said it is "actively settling" claims for canceled events and travel and would pay out $150 million if restrictions on mass gatherings lasted six months from March. The company said those claims would rise by $25 million if the lockdown lasts more than six month.
Beazley said the impact of COVID-19 on its political, accident and contingency division, which includes event cancellation insurance, would be $70 million, excluding the mitigating influence of reinsurance.
The company expects a further $100 million in net claims from its marine, property and reinsurance division. The insurer said it could not offer a figure for the impact of the virus on its professional liability and indemnity business.
"It is too early to say what the quantum of claims within our liability classes will be, as these will emerge as the impact of the pandemic is fully realized over the next one to two years," the insurer said in its first-quarter results briefing.
Hiscox said it has received claims on its business interruption portfolio, but said its policies did not offer protection from pandemics. The insurer added it has 10,000 customers who had bought the cover, and that 70% of them have typical monthly revenues of less than £40,000 ($49,000).
The London-based company has received litigation threats from companies forced to close during the U.K.-wide lockdown, many of whom were sold business interruption cover that included notifiable disease extensions.
"A number of U.K. policyholders have disputed the application of their policy in relation to business interruption," Hiscox said. "As a priority [we] will therefore work with the UK insurance industry, its regulators and its customers to seek means of expediting resolution through the range of independent mechanisms available."
--Editing by Rebecca Flanagan.
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