Businesses were already sounding the alarm in September, fearing sharp price rises when contracts came up for renewal. It's now a reality: insurance premiums are reaching unprecedented levels, and new exclusions are being added to contracts.
Insurance: rising prices and reduced coverage
As the Association pour le Management des Risques et des Assurances de l'Entreprise (AMRAE) feared back in September, the renewal of corporate insurance contracts at the end of 2020 is highly problematic.
First of all, prices are being revised upwards, and contracts are reaching unprecedented levels. Deductible amounts are also on the rise, a clear signal to companies that insurers, reeling from the Covid-19 pandemic, want to minimize risk.
Many insurance companies are now asking policyholders to sign endorsements specifying that they are not covered in the event of an epidemic. Some of them have had run-ins with the law, and have had to compensate insured companies for business losses resulting from containment measures.
A reversed balance of power between insurers and companies
For the past 20 years, the balance of power between insurance companies and businesses has generally been in favor of the latter, but the situation is now reversing.
Insurance companies seem to be seizing the "opportunity" presented by the Covid-19 epidemic to review their position on other risks. For example, many have also excluded coverage for cyber risk from their policies, but also, for retail, coverage in the event of strikes and riots. The Gilets jaunes movement had in fact forced many businesses to draw curtains during the demonstrations, resulting in sales losses that were sometimes substantial.
The Association pour le Management des Risques et des Assurances de l'Entreprise would like companies to be able to set up "captives", similar to the insurance or reinsurance companies of major groups that do not operate in this sector. The aim is to enable companies to become their own insurers via these captives.