Covid-19 has served as a wake-up call for the opportunities presented by non-damage business interruption insurance, according to Lloyd’s CEO John Neal.
Speaking during The ReInsurer’s first virtual panel discussion, Neal also revealed the pandemic had accelerated progress in the digitalization of the Lloyd’s market by three to five years.
Neal said the pandemic had highlighted businesses’ need for non-damage BI cover and said both Lloyd’s and the broader industry would need to work with governments to help meet this need.
He acknowledged that some existing BI policies had not performed as customers expected during the pandemic but acknowledged most were not designed to meet this type of event.
But he said the Lloyd’s market was responding to Covid-19 claims promptly, and was working to settle valid claims as quickly as possible.
“We have had 45,000 claims reported, of which 40 percent have been paid,” he said.
“We said we expected losses in and around $4bn. Where there is cover in place we are determined to crack on and settle those claims as quickly as we can,” he said.
“Even today we are involved in insuring over 100 of the clinical trials taking place to get a vaccine out there.”
On the market’s progress towards digitalization, Neal said Covid-19 had ultimately accelerated momentum.
“We have to get into a data-led world, and change our thinking around digitising contracts,” he said.
“We were struggling to get that debate heard and understood, and it isn’t as simple for us as it is for personal lines. But Covid-19 has fundamentally accelerated our thinking by as much as three to five years. We feel better for it in our ability to fulfil some of the ambition we described a year ago to enhance the marketplace.”
Lloyd’s reopened its doors on 1 September after being closed for 165 days – the longest closure in the market’s 350-year history.
Several measures have been introduced with the building operating at a reduced capacity of 45 percent to maintain social distancing.
Face masks are compulsory in all public areas of the building, with detailed floor plans created to enable brokers and underwriters to navigate the trading floors.
Passholders are now only permitted to enter the building on certain days of the week dependent on line of business, with the exception of Fridays, which will be open to all classes.
Neal said the reopening had been designed to allow the room to operate in both a physical and virtual world.
“We need to take the good lessons from Covid-19 in our thinking around building back better,” he said.
”Covid-19 has taught us two things – the way in which the new world can operate and accelerated our ability to do that, and reminded us the ability to connect physically is important, and we need to recover that as quickly as we can.
”There is a value in physical connection and the real world, for all of our wellbeing and all of our health. We do have a responsibility to get back to work and to get the economy moving as well and do our bit in that respect.”
Neal was speaking as part of The ReInsurer’s first virtual panel discussion, hosted in association with EY.
Watch our first virtual panel debate in full: