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Advisen Europe Front Page News - Friday, April 24, 2020

TOP NEWS: Hiscox, Beazley Each May Take Over USD150 Million Virus Hit
TOP NEWS: Hiscox, Beazley Each May Take Over USD150 Million Virus Hit
Publication Date 04/22/2020
Source: Alliance News

(Alliance News) - Hiscox Ltd and Beazley PLC expect between them to take more than a USD300 million hit from the Covid-19 pandemic, the FTSE 250 insurers separately updated the market on Wednesday.

Hiscox shares were 2.8% higher at 819.80 pence each on Wednesday morning. Beazley was down 3.2% at 354.80p.

Beazley said gross premiums written in the three months ended March 31 were 13% higher at USD840 million from USD743 million in the year prior. An "early estimate" by the insurer however, forecasts USD170 million in losses resulting from Covid-19, net of reinsurance.

Beazley Chief Executive Officer Andrew Horton said: "The events seen in the first quarter of 2020 have been unprecedented. Covid-19 has touched every corner of the globe and the impact of this pandemic is still being assessed."

Investments and cash were 13% higher year-on-year at USD5.77 billion, Beazley said, and it swung to a first quarter investment return of minus 1% from positive 2% in the first quarter of 2019.

The company also named Bethany Greenwood has the new head of its cyber & executive risk division, taking over from Mike Donovan.

Meanwhile, Hiscox said it expects to pay net claims totalling USD150 million. Should curbs on travel and mass gatherings be prolonged more than six months, these claims could rise by USD25 million.

"Hiscox is actively settling claims for event cancellation and abandonment, media and entertainment and other segments including travel," the company explained.

"Hiscox is also receiving claims as a result of economic losses following government action to stop the spread of Covid-19. Like others in the industry, Hiscox UK's core small commercial package policies do not provide cover for business interruption as a result of the general measures taken by the UK government in response to a pandemic."

Hiscox has been one of the companies in the firing line over payment of business interruption claims arising from the UK government lockdowns due to the virus. A Hiscox Action Group has been set up by a group of brokers and loss adjusters to look at whether or not they have a case to take legal action against the company.

Public relations firm Media Zoo alleged that Hiscox is trying to avoid paying out for what customers believe are legitimate claims, The Times newspaper reported earlier in April.

Hiscox said on Wednesday: "A number of UK policyholders have disputed the application of their policy in relation to business interruption. Hiscox recognises these are extremely difficult times for businesses and is determined to help provide greater certainty for customers. As a priority it will therefore work with the UK insurance industry, its regulators and its customers to seek means of expediting resolution through the range of independent mechanisms available.

"Hiscox believes its business interruption exposure to Covid-19 is limited in Hiscox Europe and it has negligible exposure in Hiscox USA."

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