Insurance
A global pandemic has severely tested the insurance industry and the public’s patience with it. How to adjust?
‘Insurance is in a perfect storm at the moment. After years and years of what we would call a soft market – characterised by overcapacity, with insurers competing on price and breadth of cover, leading to broad policy wordings and cheap product – a series of events, of which Covid is just one example, is now leading to a correction’, explains Herbert Smith Freehills partner Paul Lewis when discussing the wider effects of the Covid pandemic on the state of the insurance industry.
Whatever its contributing factors, the correction, in some market segments at least, has been dramatic. Says Lewis: ‘A real headline area that has been hit is directors and officers market protections, particularly those which provide class action coverage for securities claims. Beyond this, we are seeing increased prices and tightening of the wordings where broad coverage was given before. It is also now a much more contentious claims environment. Policyholders trying to get claims paid are now having much more of a challenge to get these paid’.
