This week: Contra proferentem


No – it’s not a Harry Potter spell. This week the Financial Conduct Authority said it would whip out the ‘contra proferentem’ argument on behalf of policyholders in its business interruption test case against insurers.

The argument is also known as ‘interpretation against the draftsman.’

The regulator confirmed it will bring it to the court’s attention while making the point that “defendants’ subjective intentions (or their reasons behind the design of the wordings) is not relevant or admissible.”

Some of the eight insurers taking part in the High Court test case are expected to argue that pandemics were never intended to be covered by BI insurance.

Revealed in documents filed by the regulator, some brokers have railed against insurers’ BI claims handling, having told the FCA they worry it could cause “long-term” damage to the industry.

Post compiled a visual guide to some of the numbers involved in the case; for example, the FCA has received 105 letters from concerned MPs, 51 relating to RSA’s Cottagesure policies. Meanwhile £1.2bn in claims value could be at stake, with 8500 businesses affected, depending on the outcome of the exercise.

Insurers may very well be left wishing they could magic away the reputational damage some have forecast the BI furore will leave them with.

With the regulator focusing in on BI, elsewhere the government was defending its decision not to include alternative dispute resolution in plans for the incoming whiplash portal.

Comments made by the Parliamentary Under Secretary of State, Alex Chalk, this week left some concerned that part two of the claims reforms could be consigned to the “dustbin of history”.

Last week Post reported on anti-racism and anti-discrimination promises being made by industry bosses; this week I argued that pledger Pat Gallagher has failed to address the elephant in the room after court action last year saw a judge label comments made by Gallagher execs about an employee as “abusive and racist.”

 As the Black Lives Matter movement continued to make global headlines and protests continued, we noted that Liberty Mutual and AIG had made charitable donations to anti-racism charities.

And Dive In, the industry’s diversity and inclusion festival, revealed it will be taking on a virtual format this year.

In a busy week for insurtech news and views, we revealed Buzzvault has closed its managing general agent business after Covid-19 scuppered its latest raise.

Meanwhile insurtech Lemonade filed for an initial public offering on the New York Stock Exchange. Post picked out some key takeaways from its prospectus.

Our Covid-Casts continued, this week with a tech-focus. In a property and contents special we spoke to Getsafe, Hippo and Urban Jungle.

In a claims focus episode, special guests were Floodflash, Snapsheet and Tractable. While in two distribution specials, we were joined by guests from Hokodo, Kasko and Wrisk and Next Insurance and Trov.

In this week’s My life in quarantine segment, we shared how the British Damage Management Association is honouring members from the damage management industry who have gone the extra mile.

In blogs, Bupa CEO Alex Perry shared his thoughts on adaptation and innovation in response to Covid-19. Also on innovation, Leakbot CEO Craig Foster took a look at smart telematics.

Brightside’s Richard Beaven blogged on inclusion in insurance as he reflected on a Pride month that sees virtual celebrations rather than solidarity in the streets.

And Swiss Re UK and Ireland CEO Tava Madzinga set out eight actions for insurers to maintain balance sheet strength and support sustainable resilience in the face of climate risk.

Stay safe and enjoy the read,

Jen Frost, news editor


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