Hiscox has little business interruption exposure to COVID-19, with a limited exposure in Europe and a “negligible” exposure in its US retail business, according to the re/insurer.
Hiscox stressed it has substantial reinsurance cover in place covering its retail exposures. However, its core policy wordings do not provide cover for business interruption as a result of the general measures taken by the UK government in response to a pandemic, it said.
Hiscox estimates it could make a net loss of around $175 million for losses emanating primarily from event cancellation, entertainment and travel in a global pandemic scenario. The re/insurer is paying claims for these lines of business and the claims are progressing in line with its expectations, it added.
Hiscox UK provides business interruption cover to SMEs as part of its small commercial package policies. It estimated that around 10 percent of its UK small commercial package customers purchase cover for business interruption, of which around 10,000 have been directly impacted by mandated government closure to stop the spread of COVID-19.
Over 70 percent of these customers have monthly revenues of less than £40,000 in a normal trading environment, Hiscox said, with a significant proportion below £10,000 per month. “The level of economic loss experienced by these businesses is likely to be materially lower than revenues in a normal trading environment,” it said.
Hiscox, Business interruption, COVID-19