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MarketScreener Homepage  >  Equities  >  Xetra  >  Hannover Rück SE    HNR1   DE0008402215

HANNOVER RÜCK SE

(HNR1)
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UK businesses not covered for pandemic, insurers tell Supreme Court

11/17/2020 | 02:50am EST
Coronavirus disease (COVID-19) pandemic in Manchester

LONDON (Reuters) - Major insurance companies told the UK Supreme Court on Monday that thousands of small companies battered by the coronavirus pandemic were not eligible for business interruption payouts and to suggest differently was "reverse engineering".

On the first day of a four-day appeal of a test case brought by Britain's Financial Conduct Authority (FCA) against insurers, industry lawyers told top judges that businesses could not claim for losses stemming from nationwide lockdowns to curb the virus.

Gavin Kealey, a lawyer for insurer MS Amlin, said that only business losses related to COVID-19 infections within a 25-mile radius of insured properties were covered.

"If these insureds wanted pandemic cover or epidemic cover on a national scale, then they didn't get it," he said "... You can't reverse engineer those cases ... No, FCA, insureds, we are awfully sorry, but no."

Thousands of small firms from holiday cottage firms to restaurants and night clubs had to shut down or restrict trading during the pandemic and say they face ruin after insurers rejected claims for business interruption cover.

The case revolves around whether 21 policy wordings, affecting potentially 700 types of policies, 60 insurers, 370,000 policyholders and billions of pounds in claims, should cover disruption caused by the virus.

The wordings cover business interruption when insured premises cannot be accessed because of public authority restrictions, in the event of a notifiable disease within a specified radius and hybrid wordings.

Michael Crane, a lawyer for insurance company QBE, told the live-streamed hearing that QBE had foreseen a possible pandemic -- but that a government response that closed down almost the entire national economy and consigned healthy citizens to their homes was "inconceivable" last year.

But he added: "The fact that a contingency may have been foreseeable does not mean that an underwriter agreed to cover that contingency without limits."

A lower court in September found largely in favour of the FCA and the Hiscox Action Group, a policyholder action group that has joined the lawsuit, when judges ruled some insurers were wrong to reject the claims.

But the FCA -- and the action group -- are challenging elements of the ruling, including whether businesses have a valid claim if they are partially closed and when insurers can reduce payments.

Six insurers -- Arch, Argenta, Hiscox, MS Amlin, RSA and QBE -- are also appealing.

Insurers say they are paying valid claims but that paying out all claims could be catastrophic for the industry.

They argue that "prevention of access" clauses do not apply to government restrictions, that pay-outs should reflect the broader economic downturn caused by the pandemic and that disease clauses do not cover a nationwide epidemic.

Companies in countries from South Africa to the United States are locking horns with insurers over pandemic-related claims.

(Editing by Jane Merriman and David Evans)

By Carolyn Cohn and Kirstin Ridley


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
ARCH CAPITAL GROUP LTD. -3.08% 33.31 Delayed Quote.-7.65%
HANNOVER RÜCK SE -2.06% 132.8 Delayed Quote.1.92%
HISCOX LTD -1.50% 974.4 Delayed Quote.-2.33%
QBE INSURANCE GROUP LIMITED 0.12% 8.45 End-of-day quote.-0.94%
RSA INSURANCE GROUP PLC -0.03% 676.8 Delayed Quote.-0.09%
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Financials
Sales 2020 24 439 M 29 740 M 29 740 M
Net income 2020 844 M 1 028 M 1 028 M
Net Debt 2020 3 200 M 3 894 M 3 894 M
P/E ratio 2020 18,9x
Yield 2020 3,49%
Capitalization 16 015 M 19 495 M 19 489 M
EV / Sales 2020 0,79x
EV / Sales 2021 0,67x
Nbr of Employees 3 083
Free-Float 49,8%
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Technical analysis trends HANNOVER RÜCK SE
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Mean consensus HOLD
Number of Analysts 21
Average target price 151,54 €
Last Close Price 132,80 €
Spread / Highest target 40,8%
Spread / Average Target 14,1%
Spread / Lowest Target -25,5%
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Managers and Directors
NameTitle
Jean-Jacques Henchoz Chief Executive Officer
Torsten Leue Chairman-Supervisory Board
Clemens Jungsthöfel Chief Financial Officer
Herbert K. Haas Member-Supervisory Board
Erhard Walter Schipporeit Member-Supervisory Board
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