Pandemic spawns positives for Australian insurers

Horne highlighted that the insurance industry’s response to the COVID-19 pandemic led to positive solutions that might be used for catastrophes in the future. Specifically, collaboration between stakeholders – along with insurers, brokers, and regulators facing business interruption (BI) cases to court – is a blueprint for future cooperation without creating an anticompetitive environment.

Horne also saw internal cooperation with underwriters, in-house counsel, and claims teams working together on risk management to eliminate mistakes, including references to outdated legislation. For example, the BI cases – particularly the Full Federal Court appeal judgment on February 21, 2022 – contained valuable court guidance for insurers facing claims management issues.

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“The BI test case judgements are important because of the way the law has been applied,” Horne said. “The courts reminded us we should not immediately apply the contra proferentem rule against an insurer in the case of ambiguity but first seek to determine whether the parties’ objective intent can be ascertained from the contract when read as a whole.”

Various initiatives and solutions also boomed during the pandemic, including DSpark Tool, a web-based Australian Competition & Consumer Commission (ACCC)-authorised portal aggregating public information about COVID-19 exposure sites and government-issued public health orders to help insurers assess COVID-19-related BI claims.

You can hear more about the Australian insurance industry’s response to the COVID-19 pandemic at the 2022 AILA National Conference from August 10 to 12 at Doltone House, Jones Bay Wharf, Sydney. The conference will feature a raft of high-profile speakers who will talk about various topics, including class actions in Australia, climate change impacts, and the liability landscape for professionals.