Hollywood’s Insurer Braces for Claims Due to COVID-19
Thursday, 10 08 2020, Category: Insurance and Reinsurance, Country: United States
Allianz SE, Europe’s largest insurer, is bracing for a flood of claims after movie and television studios were forced to curtail production during lockdown.
A unit of Allianz, which says it’s the largest insurer of Hollywood studios, has set aside about 488 million euros ($575 million) this year for coronavirus-related claims, with much of that coming from the entertainment industry. Filming of movies and television programs in the U.S. and other countries was shut down or scaled back at the height of the outbreak, leading production companies to seek compensation.
“The resumption of film productions is slow,” said Thomas Sepp, chief claims officer of the Allianz Global Corporate & Specialty business. That’s especially true at U.S. studios, he said.
The entertainment industry has been battered by the pandemic, which has forced the cancellation and postponement of major events including the Summer Olympics in Tokyo. Restrictions on public gatherings have closed theaters and cinemas, with Cineworld Group Plc announcing this week that it would temporarily suspend operations at all its U.S. and U.K. venues. And television companies are scrambling to fill airtime, with the pipeline of programs only now slowly resuming.
This disruption of entertainment companies has translated into a rush of claims seeking compensation from insurers for lost income. Allianz alone took a 1.2 billion-euro hit to earnings in the first half from virus-related claims. In response, some insurers have stopped selling coverage to protect against business losses in future pandemics.
Sepp said new film-production contracts sold by Allianz won’t cover losses related to Covid-19, “so that we do not take any new risk there.”
The company has been insuring movies for more than 100 years, according to its website. It has expanded into areas including live music and events and motorsports.
Source: Insurance Journal