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COVID-19 has led to a multibillion-dollar loss for the contingency market, while coronavirus exclusions are being applied on all new and renewal health care business, according to a London market update from Miller Insurance Services LLP.
Contingency is seeing premium rate increases of 35% at a minimum, while rates for distressed business are up by 50% or more, Miller said in its report Wednesday.
“There have not been any markets to withdraw from contingency to-date, but several have stopped writing new business until further notice,” Miller said.
Communicable disease coverage is also excluded until further notice, it added.
In health care, there are “huge changes” with COVID-19 exclusions being applied on an almost marketwide basis, Miller said.
Most insurers that are considering new business have limited appetite to only those risks “large enough to have the infrastructure to deal with COVID-19 in place and to adhere to all governmental guidelines,” Miller said in the report.
Potential government involvement in claims payment and influence over insurers’ liability, irrespective of policy wording, are also concerns, the broker said.
Hospitals are “steadier” than the long-term care sector given some states are looking to implement civil liability immunity for hospitals, it said.
Miller is the London-based wholesale unit of Willis Towers Watson PLC. In February, Willis announced it was reviewing strategic options for the business, but on April 3 Willis confirmed it is postponing the planned sale.
“Given the current COVID-19 outbreak and associated uncertainty, we have paused our current efforts to explore strategic alternatives for Miller. Willis Towers Watson and Miller remain committed to the process and will make an announcement in due course,” Willis said in a statement.
More insurance and risk management news on the coronavirus crisis here.