AXA has offered a settlement to 15,000 French restaurateurs who purchased damage-free business interruption insurance after previously declining coverage during COVID-19 lockdowns of 2020.
AXA estimates that the cost of these settlements will amount to around 300 million euros (US $ 365.5 million) before taxes and reinsurance – a cost that “is expected to be offset by favorable developments in 2021 related to COVID-19 in France and in Europe, ”said AXA. in a report.
AXA did not respond to a question about what constitutes “favorable developments” – falling COVID-19 rates or increasing insurance premiums, or both.
The proposed offer, which is open from June 21 to September 30, 2021, aims to cover 15% of the turnover of the activity of these restaurateurs during the COVID-19 containment periods of March 14, 2020 and October 29, 2020 .
A research note published by Berenberg Capital Markets applauded the regulation for three reasons:
- It covers all 15,000 customers without prejudice to business interruption, even those who have gone to court and lost and those who have now become insolvent,
- Claims can be paid promptly, starting June 21, and
- The timing of the offer is good, as it was announced the day after the opening of French restaurants for dining room business.
“We believe the settlement bodes well for the future growth and profitability of AXA in France, its largest non-life insurance business,” said the Berenberg research note, written by analysts Michael Huttner and Thomas Bateman.
Nonetheless, the note adds, AXA continues to assert that its policies did not provide cover for a lockdown imposed by a pandemic.
“On this subject, the French courts have rendered contradictory judgments, and the new contracts and renewals of AXA have been rewritten to make the exclusion even clearer; the settlement is an elegant way to move forward and avoid long and costly trials, ”Berenberg said.
A Royal Bank of Canada (RBC) research note said the settlement offer “raises the question of whether COVID-19 claims are in the rearview mirror.”
“For AXA, the impact on profits of this regulation is neutral for 2021. The regulation will remove any uncertainty and probably create some goodwill with policyholders,” said the research note written by Kamran Hossain, analyst for RBC Europe. Ltd.
During the COVID-19 crisis, AXA has supported hundreds of thousands of customers and contributed “significantly to the financing of the economy and the recovery,” said Patrick Cohen, CEO of AXA France, in a statement .
“We regret the lack of understanding that has developed with some of our restaurant customers, even though this sector has been particularly affected by the health crisis,” added Cohen.
“At a time when restaurateurs can finally welcome their customers back to their establishments, we want to act so that everyone can look to the future and resolutely embark on the path of resumption of activity,” he said. -he declares. “Unique in its scale for AXA France, this initiative will be carried throughout France by our 3,000 general agents and all of our distribution partners with the support of our teams.
COVID-19 complaints Restaurant AXA XL France
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