How the COVID-19 crisis will impact insurance companies going into 2021 is a question on the lips of the global insurance industry. Shining a light on what the year ahead holds for insurers in France, the French finance minister Bruno Le Maire has reported that French insurers have committed to refrain from increasing premiums on companies in sectors most impacted by the COVID-19 outbreak.
Reuters reported that this follows pressure from Le Maire, which saw insurers being faced with the prospect of being hit by a €1.2 billion (approx. AU$1.96 billion) tax if they did not agree to freeze premiums next year.
Last week, the Senate added an amendment to the 2021 budget bill to levy this tax on the insurance sector, an amendment which would have required approval in the lower house parliament to be retained. At the time Le Maire said that the lower parliament, where the government’s party has a majority, would agree to the tax if insurers did not commit to freezing premiums by Monday.
AXA France CEO Jacques de Peretti hit out at the Senate’s tax amendment, telling Le Parisien newspaper that “it is scandalous to face such blackmail”. This follows a warning earlier this month from AXA of a hit to its 2020 results due to the pandemic which has seen it make payouts to customers, including for cancelled events.
Reuters noted that Le Maire has repeatedly clashed with the insurance industry this year as he believes it has not been doing enough to ease the struggles of businesses dealing with the impact of COVID-19. Le Maire has also expressed concern that some insurers were looking to hike premiums and said the premium freeze would help businesses in both the hospitality and leisure sectors.
“We hope that this constructive, useful and efficient agreement will end the conflict situation and bring solidarity to the sector,” he said following a meeting with insurance industry executives.