Lloyd’s of London has announced that it is due to pay £5 billion in Covid-19-related claims, with Lloyd's reinsurance covering £2 billion of that amount. However, Lloyd’s Chief Executive John Neal reasons that £5 billion is not that big a payout considering the scale of the pandemic, and that the real tragedy was the impact on individuals and businesses, as they would likely find that they did not have adequate policy coverage.
Commenting on Lloyd’s half-year results, which, excluding Covid-19 losses, saw the market deliver an underwriting profit of £1 billion, Neal said: “Our half year results demonstrate that our robust approach to performance management and remediation has begun to take effect, evidenced by a significant turnaround in the underlying performance metrics, which give the truest indication of our market’s profitability.”
The outcome of the FCA case to help move the industry in the right direction
Neal said that the court judgement on the FCA, which is due 15 September, would be beneficial to both customer and insurers as ‘everyone would know exactly where they stand as to what is covered and what isn't covered’.
"It's a real issue, isn't it, when you look at systemic and complex risk, whether it's business interruption, or cyber, or climate," he said. "And that's why we've been very engaged with [the] government to say: 'Look, what can we do as an industry, and what can you do, to ensure that businesses and people are better protected when these events come along?'."
The reality is that the vast majority of policies do not provide cover for this type of loss, Neal said: “And we’re as bothered by that as anything, to try and make sure that next time around, whatever the event, customers have the opportunity to buy the right products and services.”