Legal alliance Global Insurance Law Connect (GILC) has warned that despite the impact of the COVID-19 pandemic insurers cannot ignore other pressing issues such as climate change and a global contraction in the D&O market.
GILC is a formal alliance of insurance law firms spanning four continents and has published the second edition of its annual RADAR report, which reviews the important legal, regulatory and socio-economic issues facing insurers across the globe.
The report highlights key issues, some of which are common across many countries. The most significant of these in 2020 are the impact of climate change, and of the global contraction in the D&O market. Meanwhile, the report also casts a light on country-specific issues in many of the major and growing insurance markets around the world.
Jim Sherwood Chairman of Global Insurance Law Connect, introduced the report by saying that the world was a very different place for insurers and their clients.
“There is no doubt that COVID-19 will introduce a completely new set of priorities for insurers,” he said. “Already, we have seen a huge impact across multiple lines of cover. The immediate issues arose around business interruption insurance, where pandemic cover was in some cases valid, and in some cases not. In several countries, notably the US, there have been calls for insurers to be forced to pay many more claims by retrospectively rewriting insurance contracts. The question of what is and isn’t covered has generated, and will continue to generate, legal activity across the world.”
He added: “Meanwhile, beyond the industry, the economic shock of the COVID-19 shutdown is causing a contraction in jobs and GDP across the globe that is completely unprecedented. While governments struggle to support workers in their local economies, many businesses are failing, and this will impact insurers through D&O cover and investor litigation.
“Of course, all of this pales into insignificance compared to the lives that are being lost in the pandemic, stretching the health systems of every country almost to breaking point. Against this rapidly moving backdrop, we found it impossible in April 2020 to quantify every impact that COVID-19 will have. We have decided that we will tackle the specific legal issues raised by coronavirus in a separate report, and we look forward to sharing that with you in the coming months.
“Meanwhile, other market forces still exist, some of them hugely significant in their own right; and some, such as climate change, brought into new focus by the notable climate impact of the global economic shutdown. These issues remain important and are the focus of this year’s RADAR report.”