PARIS (Reuters) - Denis Kessler, chief executive of SCOR, said on Thursday he would favour an EU-wide pandemic scheme to cover business interruption losses, rather than any national plan, as the French reinsurer swung to a quarterly loss.
Insurers across the globe are feeling the impact of COVID-19, as companies claim for cancelled events and lost business because of lockdowns, although insurance contracts can contain clauses that rule out cover for business interruption caused by a pandemic.
To address the shortfall, France is working on a mechanism for pandemic insurance cover with possible state backing.
“Personally, I would prefer to have a European project, rather than national projects. If there should be a project, I don’t understand why it would stop in the middle of the Rhine,” Kessler told journalists during a call.
He added he would assess the projects proposed and support them according to “our appreciation of the risk that we could accept putting in our portfolio”.
Kessler said reinsurers around the world believed the industry should be extremely careful before embarking on schemes that could significantly weaken the insurance sector.
The state should primarily compensate for operating losses due to pandemics, given that it is responsible for the health and safety of the population, lockdowns and access to vaccination and healthcare, Kessler added.
SCOR reported a 136 million euros (123.8 million pounds) loss in the second quarter, as it set aside 456 million euros in provisions for possible COVID-19-related claims.
Most of the provisions booked in its life reinsurance business were to cover COVID-19 claims in the United States, where mortality rates have been high.
In its property and casualty business, SCOR said it was exposed to a “very small amount” of business interruption contracts that provide pandemic coverage.
Reporting by Maya Nikolaeva; Editing by Carmel Crimmins and Barbara Lewis
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