Mactavish calls UK Covid-19 insurance industry steering group a ‘PR gimmick’

Mactavish has called the UK’s new Covid-19 insurance industry steering group a “PR gimmick” and said the sector has failed in its response to the coronavirus. The new group plans to work with Pool Re to ensure the insurance industry can help customers and communities through the current crisis and strengthen its response to future pandemics. The group already has a number of industry heavyweights from leading insurers and brokers signed up, including CEO of Pool Re Julian Enoizi, and said further members will be added soon. With Mr Enoizi on board, it looks like a possible move towards a state-backed pandemic insurance scheme. UK risk management association Airmic will surely be added to the group to represent the voice of the customer. Its CEO John Ludlow told Commercial Risk Europe that the association supports the concept and looks forward to being involved. But claims dispute expert Mactavish is unimpressed by steering group and believes it will become little more than a PR gimmick. The firm also said the insurance industry has simply failed to learn lessons from previous pandemics Bruce Hepburn, Mactavish CEO, said: “In terms of pandemics, SARS and MERS means the industry has had ‘trial runs’ to learn from, but still it failed to make itself sufficiently relevant to this crisis. “The sector has failed in its response to coronavirus and by the time this new steering group makes any recommendations, thousands of businesses will have gone bust. It’s a cynical ploy and PR gimmick to help draw attention away from its failings, unless it focuses more on how it can helpright now,” he added. Mr Hepburn pointed out that the steering group’s current membership consists solely of insurance professionals. This means it is marking its own homework, he said. “Will they really hold the industry to account and shine a proper light on its failings and make the radical recommendations for change that the sector needs, or will they simply pass the buck on to the government?” he asked. Mactavish said the steering group should have been formed after SARS, MERS and other trial runs the world has faced. It said the problem needs to be solved by a “new generation of people with a different perspective on the role of insurance in society”. Mactavish added that the insurance problems laid bare by Covid-19 are not new. It said a long-term focus on price over value of cover has led to considerable erosion of insurance contract quality, growing opacity around broker fee structures and an increasing one-size-fits-all approach to complex risks. The company launched a reform agenda document in early March to discuss failings of the insurance market. It hinted at some of the problems being exposed by the coronavirus. “Over the last 30 or 40 years, the commercial insurance market has made a collective strategic error. By marketing insurance as a price-driven commodity, it sowed the seeds of its current difficulties. A complex financial instrument capable of preserving or breaking a company’s balance sheet has been sold as if it were essentially interchangeable. All too often, policyholders only realise that this is not the case when they have a claim reduced or denied unexpectedly – causing real economic damage and further tarnishing the reputation of our industry,” the document stated.

Mactavish calls UK Covid-19 insurance industry steering group a ‘PR gimmick’

Want to read this article?

Read Next

WTW and Riskonnect partner on risk diagnostic tool

AM Best upgrades outlook for UK market and expects further rate hardening

Marsh extends Cyber ECHO facility to $125m of excess capacity

Beazley grows premiums 7% in Q1 as overall rates flatten

Hartford profits soar 41% in first quarter

WTW and Riskonnect partner on risk diagnostic tool

AM Best upgrades outlook for UK market and expects further rate hardening

Marsh extends Cyber ECHO facility to $125m of excess capacity

Beazley grows premiums 7% in Q1 as overall rates flatten

Hartford profits soar 41% in first quarter

Want to read this article?

Read Next

WTW and Riskonnect partner on risk diagnostic tool

AM Best upgrades outlook for UK market and expects further rate hardening

Marsh extends Cyber ECHO facility to $125m of excess capacity

Beazley grows premiums 7% in Q1 as overall rates flatten

Hartford profits soar 41% in first quarter

Related Articles