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Crédit Mutuel has opened Pandora’s box for insurers (Free translated synthesis)
Link of the article column on L’Opinion (pdf)
As of 15 April, the insurance sector had made commitments representing 3.2 billion euros for the pandemic. It is the only one to contribute 400 million euros to the solidarity fund set up by the State for very small companies.
At the beginning of the crisis, insurers were wildly hopeful that they would not be told about operating losses. Because these are not insurable under a pandemic: there is no mutualization of risk since all companies are affected. If we wanted to insure them, we would need the State’s assistance as for natural disasters: the insurers are working on a new regime, but it cannot work posteriori for Covid-19. It could have been all over. Insurers had even escaped new taxes proposed by parliamentarians of all stripes and rejected by the government.
However, on 22 April, the insurance company Crédit Mutuel-CIC introduced a “mutualist reminder premium” of 1 500 to 20 000 euros (7 000 euros on average) for its some 27 000 professional policyholders, arguing that even if operating losses were neither insured nor insurable, a gesture had still to be made for customers.
But the competing companies discovered that Crédit Mutuel‘s contracts potentially paved the way for full compensation for operating losses… well in excess of the 200 million euros paid out in premiums.
Companies are now looking closely at their contracts, and in mid-April, MAAF acknowledged that some of its contracts were eligible for compensation.
“In addition to the general terms and conditions of contracts, there are often two or more additional layers of special conditions” explains Jérôme Goy, a partner at Enthémis. “Sometimes there are clauses that are hand-stripped, negotiated at the end, which are inapplicable for some policyholders. There is always room for interpretation, it’s linked to the nature of the law and the practical bazaar of reality. Sometimes the right clause has simply not been copied!”
Axa France has been taken to court for a contract distributed by its broker, and professional federations and lawyers are calling on traders not to sign papers sent by their insurers about premiums.