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Wed Apr 29, 2020, 01:10 PM

U.S. insurers want taxpayers to back pandemic coverage for businesses

Source: Reuters

(Reuters) - The U.S. insurance industry is promoting the idea of an insurance plan backed by the federal government that would help businesses that in the future suffer losses from a pandemic, people familiar with the effort told Reuters.
...
Insurers want the pandemic policies to be backed by the U.S. government, similar the government-supported commercial terrorism products after the attacks of Sept. 11, 2001.

Chubb Ltd Chief Executive Officer Evan Greenberg called for that kind of public-private partnership on April 22. John Doyle, chief executive of insurance broker Marsh LLC, a Marsh & McLennan Companies unit, also offered “assistance” in crafting such an idea in a March 30 letter to U.S. Treasury Secretary Steven Mnuchin and White House economic adviser Larry Kudlow.

Two non-insurance trade groups also sent pleas for such a policy to U.S. lawmakers and officials on April 20: RIMS, which represents risk managers at major businesses and the National Retail Federation, which partnered with 16 other business groups.

Read more: https://www.reuters.com/article/us-health-coronavirus-insurance-pandemic/u-s-insurers-want-taxpayers-to-back-pandemic-coverage-for-businesses-idUSKCN22B1J8



Am I the only one who sees this as another shameless bailout request? The insurance industry doesn't want to look too closely at their customers and their behavior. It would be aweful if they are held liable for the results of businesses opening up too soon.

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Arrow 30 replies Author Time Post
Reply U.S. insurers want taxpayers to back pandemic coverage for businesses (Original post)
RainCaster Apr 2020 OP
sinkingfeeling Apr 2020 #1
iluvtennis Apr 2020 #18
sinkingfeeling Apr 2020 #22
iluvtennis Apr 2020 #28
sandensea Apr 2020 #2
PoliticAverse Apr 2020 #3
Newest Reality Apr 2020 #4
NotHardly Apr 2020 #24
SWBTATTReg Apr 2020 #5
cstanleytech Apr 2020 #6
bucolic_frolic Apr 2020 #7
Bernardo de La Paz Apr 2020 #8
Freethinker65 Apr 2020 #9
FBaggins Apr 2020 #13
Freethinker65 Apr 2020 #17
Blasphemer Apr 2020 #19
FBaggins Apr 2020 #10
slumcamper Apr 2020 #12
FBaggins Apr 2020 #16
Voltaire2 Apr 2020 #15
cstanleytech Apr 2020 #21
slumcamper Apr 2020 #11
Voltaire2 Apr 2020 #14
LiberalLovinLug Apr 2020 #20
Lock him up. Apr 2020 #26
LiberalLovinLug Apr 2020 #30
Xolodno Apr 2020 #23
catrose Apr 2020 #25
BadGimp Apr 2020 #27
SunSeeker Apr 2020 #29

Response to RainCaster (Original post)

Wed Apr 29, 2020, 01:13 PM

1. First, make all travel insurers pay out even in a pandemic. Then tell

the business insurers no dice.

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Response to sinkingfeeling (Reply #1)

Wed Apr 29, 2020, 02:11 PM

18. + agree. I have overseas trip pending for Septemeber. My current thinking is that CV-19 outbreak

won't be contained by then, so I'll likely lose the money I paid for airline tickets ($1xxx) and my air travel insurance won't cover me.

If I have to eat the $1xxx, I'll eat it as my health/safety is more important than money.

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Response to iluvtennis (Reply #18)

Wed Apr 29, 2020, 03:49 PM

22. I am booked for 6 week trip and have paid about $23K. Waiting to

see what tour companies, airlines, and trains are going to do.

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Response to sinkingfeeling (Reply #22)

Wed Apr 29, 2020, 07:29 PM

28. Aww no...I should always put myself in others shoes. MY ex told me today that it the airline

cancels the flight -- in your case if the tour operator cancels the trip -- they have to refund the entire amount. They can't play that game of we'll give you a "voucher" to use within the next year.

Keeping my fingers crossed for you.

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Response to RainCaster (Original post)

Wed Apr 29, 2020, 01:13 PM

2. Imagine that.

Nothing new under the sun.

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Response to RainCaster (Original post)

Wed Apr 29, 2020, 01:14 PM

3. I believe that's called "privatizing the profits, socilizing the losses". n/t

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Response to RainCaster (Original post)

Wed Apr 29, 2020, 01:17 PM

4. The IMAGE!

When the time comes, all the baby birds of the Vested Interest Cockwomble raise their little heads and open wide their craws to be stuffed with delicious, regurgitated taxpayer money. Yum!:

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Response to Newest Reality (Reply #4)

Wed Apr 29, 2020, 04:48 PM

24. Nice pic... and you ain't wrong. Greedy f**king arses.

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Response to RainCaster (Original post)

Wed Apr 29, 2020, 01:18 PM

5. Oh, so is the industry going to rebate all of us that money they have already recieved as ...

premiums for the last 10-20 years to taxpayers? They willing took on the risks, they alone deserve what they get. If they go out of business, so be it. Their assets should be seized and used to pay outstanding claims.

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Response to RainCaster (Original post)

Wed Apr 29, 2020, 01:18 PM

6. Fuck that!!! The insurance companies are little more than legalized gambling companies and

taxpayers should not be forced to bail them out when they place a bad bet.

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Response to RainCaster (Original post)

Wed Apr 29, 2020, 01:25 PM

7. If they had socialized risk from the beginning of insurance

way back during Lloyd's of London and Dutch East India Company and Hudson's Bay Company, would there have been any investors? The whole idea of taking on risk is to hopefully make a profit. This insurance industry trial balloon is another attempt to socialize the risk and privatize the profits. Risk is great when you can push it off on someone else with deep pockets.

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Response to RainCaster (Original post)

Wed Apr 29, 2020, 01:28 PM

8. Nobody wants bigger handouts than Big Biz. . . . nt

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Response to RainCaster (Original post)

Wed Apr 29, 2020, 01:31 PM

9. So the insurance companies intend to honor those that currently have a pandemic insurance rider?

In the future, the insurance companies do not want to offer a policy or rider that would cover a pandemic (or wish to specifically exclude pandemics from all of their policies)?
Fine.

No bailouts for current active policies.
In the future, if you want pandemic coverage, you will need to look elsewhere. If the US government wants to sell such policies, like I believe the do for flood insurance, then ok.
I cannot imagine what the rates would be to be covered after this, but that is a job for a scientist, statistician, or actuary.

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Response to Freethinker65 (Reply #9)

Wed Apr 29, 2020, 01:43 PM

13. Who has pandemic insurance?

I haven't seen such a policy.

In fact... here's a story of a company that tried to create such insurance in 2018 - and not a single company purchased it.


https://www.insurancejournal.com/news/national/2020/04/03/563224.htm

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Response to FBaggins (Reply #13)

Wed Apr 29, 2020, 02:09 PM

17. I read somewhere that someone had actually paid for such a policy and the claim was being denied?

I imagine it was sold for not much more than a typical policy as a way to make easy money that would never generate a claim.
It is also possible that pandemics were not specifically excluded from current policies?

Honestly, I do not know.

Found a link.

https://www.claimspages.com/news/2020/04/08/cinema-owner-sues-insurer-over-covid19-claim-denial-despite-pandemic-coverage/

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Response to RainCaster (Original post)

Wed Apr 29, 2020, 01:37 PM

10. The responses here don't fit the story

People should read the rest of the article. This isn't a request for a bailout.

Business insurance generally doesn't cover cases where the government orders your business to close for several weeks or business just dries up because people are staying home. So these insurance companies aren't going to lose tons of money due to the pandemic (in fact, some will probably do pretty well as behaviors that lead to losses like driving a car or getting injured in a recreational sport have declined significantly).

The concern is that their customer base (in this case businesses) now wants to insure against this type of loss... but no insurance company can afford to provide such a product.

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Response to FBaggins (Reply #10)

Wed Apr 29, 2020, 01:40 PM

12. In other words, they are in it for fair weather profit and want to socialize the risk...

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Response to slumcamper (Reply #12)

Wed Apr 29, 2020, 01:51 PM

16. Maybe in general... but not in this case

In order to provide insurance... there has to be a way to calculate the risk (so that you know what to charge).

If there's a x% chance of a certain person dying in the next year... you can charge relatively little over the proportional cost to pay out that life insurance - because you're selling the same policy to a million similar people. Roughly the same percentage of your customers will die each year and you can happily pay out on all of the policies because the premiums from the ones that don't die will reliably exceed those expenses. Other types of insurance can be reinsured if there's some risk of volatility in the losses (e.g., the homes you insurance are too geographically concentrated and a single event could cause an outsized loss).

But there's no way to insure businesses against lost business due to a pandemic... because there's no larger unaffected audience paying premiums to cover those losses.

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Response to FBaggins (Reply #10)

Wed Apr 29, 2020, 01:49 PM

15. we get it.

It isn't even unreasonable, except of course that the peasants can't have healthcare, education, guaranteed income support in a crisis, a reasonable living wage, because !SOCIALISM!, but yeah, billionaire's business is hurting, so bail them the fuck out.

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Response to FBaggins (Reply #10)

Wed Apr 29, 2020, 02:36 PM

21. That is an issue between the customers and the insurance companies to hash out its not one

though that taxpayers or their money should be involved in.

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Response to RainCaster (Original post)

Wed Apr 29, 2020, 01:38 PM

11. Another fair-weather capitalist sector sobbing for a handout when shit gets real?

This system is a joke. Let it fail.

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Response to RainCaster (Original post)

Wed Apr 29, 2020, 01:45 PM

14. Of course. Socialism for Billionaires. NT.

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Response to RainCaster (Original post)

Wed Apr 29, 2020, 02:23 PM

20. But Medicare For All is a SOCIALIST pandemic!

Where almost all the money would be spent on Americans healthcare, and cost half as much. No CEO bonus pay, no shareholders demanding profits. No denial of coverage.

Fuck, if Americans are going to have to give even more to private insurers than they already do so they can meet their profit margins, then this is the height of hypocrisy.

Instead of paying for medical insurance like every other sane country through taxes, half as much of a cost as present day private premiums, they are now asked to pay premiums PLUS socialisticly prop up the insurance industry through taxes.


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Response to LiberalLovinLug (Reply #20)

Wed Apr 29, 2020, 06:11 PM

26. And no Lobbyists who purchase Representatives & Senators...

... & cabinet members. They are the middlemen of the corrupt system.

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Response to Lock him up. (Reply #26)

Thu Apr 30, 2020, 02:44 AM

30. Yup.

That's the real swamp. It should be one thing Republican voters and Democratic voters can agree on, you'd think. Yet it doesn't change.

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Response to RainCaster (Original post)

Wed Apr 29, 2020, 04:22 PM

23. Its a bit misleading.

Current Business Insurance classifies pandemics as an excluded coverage. And there are probably lawsuits flying all over the place anyway to force them to cover the business interruption anyway, but I find it highly unlikely they will succeed. It will probably go all the way to the Supreme Court as almost all companies use ISO based policies.

What they are suggesting is to do something like the Federally mandated Terrorism coverage. Every business insured in every insurer has a 1% premium on the total. The insurance company takes that and puts it aside into safe investments. Should another major terrorist attack happen and shuts down a sector of the economy, then those funds will be used support those affected.

If the fund is drained, then the Federal Government steps in to help. It's one of those things where insurance companies take the initial brunt, and hopefully the Federal Government doesn't have to step in. But should the money for terrorism dry up, then the Federal Government will get involved and the Insurance Company doesn't have worry about going belly up by burning through their surplus.

So what they are saying, something similar needs to happen for pandemics. And given how well the small business loan rescue package went, it will probably happen. I doubt it will be a 1% surcharge like terrorism, think it will be a bit more.














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Response to RainCaster (Original post)

Wed Apr 29, 2020, 05:06 PM

25. NO

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Response to RainCaster (Original post)

Wed Apr 29, 2020, 07:20 PM

27. You ain't the only one Rain...

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Response to RainCaster (Original post)

Wed Apr 29, 2020, 09:10 PM

29. But we get no free universal health coverage, while risking our lives? FUCK THAT!

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