QBE watches the US as curveball thrown at industry

QBE Insurance is watching its multibillion-dollar US insurance operations closer than ever.

In the US, states including Ohio, New York and Massachusetts threw a curve ball at the insurance industry when they drafted legislation aimed to make insurers pay billions of dollars in claims on business interruption insurance policies regardless of whether the policy contains exclusions for communicable diseases or viruses such as COVID-19.
QBE has its tentacles all over the US, generating billions of dollars a year in premiums, including US commercial property insurance, some of which includes business interruption insurance.

Like most US insurers, QBE’s policies exclude loss or damage resulting from a virus. But if the legislation becomes law these exclusions would be irrelevant and the insurers would become embroiled in costly legal action to challenge the law.

The size of the business loss is chilling. The trade group American Property Casualty Insurance Association (APCIA) estimates that closure losses for small businesses with less than 100 staff have increased to $US431 billion ($671 billion) a month. “These numbers dwarf the annual premiums for all commercial property risks in the key insurance lines of $US71 billion per year, or about $US6 billion a month,” it said.

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