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Australian insurers asked to review risk frameworks as pandemic-related claims surge By Reuters

© Reuters. FILE PHOTO: The QBE Insurance logo is seen on an office building in Melbourne February 28, 2011. REUTERS/Mick Tsikas

(Reuters) – Australia’s prudential regulator on Monday directed general insurers to review their risk management frameworks after a spate of claims over COVID-19-related business interruptions.

Many insurers were exposed to such claims through policy wordings that had not kept up to date with changing legislation, the Australian Prudential (NYSE:) Regulation Authority (APRA) said.

“The resultant legal uncertainty, and significant financial exposure for insurers, has raised concerns about the strength of insurers’ risk management frameworks,” the regulator said in a statement.

The regulator’s directive also came after a class action lawsuit against Australia’s largest listed insurer, QBE Insurance, for allegedly denying cover to policy holders for losses from business interruptions.

APRA has set a Nov. 30 deadline for completing and submitting the self-assessments.

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