Covid-19 had a major negative impact on businesses in Namibia, including on the short term insurance industry.
Riaan Vermeulen, Managing Director of Old Mutual Short-Term Insurance explains to the Windhoek Observer that not all their clients had the relevant cover for Business Interruption caused by Infectious Diseases. “It is therefore impossible to quantify the full impact on our customers though it is safe to say it was severe,” explains Vermeulen.
Commenting on the move by Old Mutual to pay out its customers despite the tough economic environment, Vermeulen explains that Old Mutual’s position has always been to accept relevant and valid claims, which is a commitment, he says, the company will always honour despite difficult economic circumstances and adverse events like Covid-19.
“Our Market Conduct Policy always guides us in treating our customers fairly and we can proudly attest to us delivering on this promise.”
Touching on the lessons Old Mutual has learnt about dealing with unexpected health and other emergencies in future, he explains, that whilst the specific cover for Business Interruption caused by Infectious Diseases was removed from short-term insurance policies internationally, one should always be ready for any form of catastrophe pertaining to our business and the devastating impact it can have on policy holders. “Quick and efficient turnaround times of claims handling is a key aspect to ensure customer satisfaction.”
Vermeulen says apart from the settlements made for those policy holders that enjoyed valid cover, the secondary impact of the pandemic on the industry was quite severe.
“The loss in income of individuals and businesses, especially the tourism industry, was evident in their selective buying behaviour on insurance products. Old Mutual has responded by selling our products at affordable and competitive premiums together with sensible options for reduction in cover.”
He says Old Mutual expects to pay all valid claims on the impact of business interruption to all customers with the relevant policies. Old Mutual expects to pay about 30 policyholders under the business interruption claims, Vermeulen says. The Covid-19 pandemic triggered a wave of severe financial losses suffered by Namibian businesses. These losses greatly impacted Old Mutual Namibia Short-Term Insurance customers who had to navigate challenging times to sustain the livelihoods of their employees.
Initially, it was unclear whether the insurance industry would consider the losses under the applicable Infectious and Contagious Disease clauses which resulted in several legal battles and court judgements.
For this reason, Old Mutual Namibia, based on its own legal interpretation, decided to proceed with accepting business interruption claims that it considered valid under the respective policy conditions.