Countries have introduced lockdowns to fight the coronavirus pandemic, forcing companies to close and furlough staff. Businesses are fighting to get insurers to pay business interruption claims as a deep recession beckons.
In response to several actions taken by the political world, that may lead to forcing insurers to retroactively cover the pandemic risk, Gabriel Bernardino said it would be wrong to retroactively change policies. "It is also impossible for insurers to control risks like business interruption that is not due to damage like floods or fire," he said.
Bernardino stressed out the necessity of designing specific mechanisms to build an increased resilience against situations similar to the current crisis, most probably gathering public and private forces. It is beyond the insurance industry's scope and capacity to cover global events of such magnitude.
"Overall the sector has weathered well this unprecedented situation," Bernardino told Reuters. "This volatility that we see on equity markets probably will continue, and we have some doubts if the market is already discounting the impact of the GDP contractions that are out there from the various authorities." EIOPA will send its recommendations for changes to the EU's executive European Commission by the end of the year.