RSA has received 25,000 Covid-19 claims since the outbreak began, but its exposure to the pandemic has been limited by reinsurance for its travel book and business interruption exclusions.
Of the approximately 25,000 Covid-19 claims received in March to the end of April, RSA said in its latest trading update that 23,000 were made on travel insurance policies.
The insurer estimates that these Covid-19 claims will cost £25 million, thanks to “substantial reinsurance protection” for its travel book and the fact that the “great majority of business interruption claims are not expected to be eligible under their coverage terms” for the virus.
Wedding cancellation and certain business interruption specialist schemes and programmes made up the remainder of RSA’s Covid-19 claims.
RSA said its priority is to “sustain good service to customers through these testing times”, with the insurer “working hard to settle claims promptly and fairly”. It is providing interim payments to support customers where relevant, and sustaining supply chains through prompt and interim payments.
Other customer support measures include coverage adjustments and waivers, payment timing relief, and discount or price capping of rates. RSA is also participating in a range of industry initiatives that are exploring future pandemic coverage options and voluntary relief funds.
Stephen Hester, chief executive of RSA Group, commented: “RSA’s first quarter results were strong, continuing the momentum seen in 2019. However, focus has now naturally shifted. Our thoughts and deepest sympathies go to those most directly affected by Covid-19. And RSA’s attention is fixed on responding to the impacts of Covid-19 on economies, our customers and through that on ourselves.”
“Whilst it is too early to estimate the extent of these, RSA is resilient and determined to sustain strong and appropriate support for our customers in these testing times. We are also very conscious of our shareholder responsibilities, especially with regards to restarting dividend payments when it is prudent to do so.”