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Coronavirus: insurer Axa calls for "a regime comparable to that of natural disasters"

2020-04-05T14:18:35.550Z


Jacques de Peretti, president of Axa France, believes that insurers cannot cover the risks linked to the pandemic alone.


At the helm of Axa France since 2016, Jacques de Peretti follows the confinement rule and works remotely like his 33,000 employees. Member of the French Insurance Federation (FFA), he wishes to defend his sector pointed out for his silence during this health crisis but above all for his refusal to compensate the operating losses linked to the Covid-19. As the leading health insurer for individuals and professionals, Axa claims 6.3 million customers in France in very large sectors (health, provident, savings, automobile fleet, etc.) and has a turnover of more than 26.2 billion d euros in 2019. Miraculous figures that are out of place with regard to the sector's contribution - 200 million euros - to the solidarity fund set up by the government. He explained himself and called on the government to create a fund to cover the risks linked to pandemics.

The insurance sector contributes 200 million euros to the solidarity fund created by the government. What is the share of AXA France?

JACQUES DE PERETTI. AXA contributes 30 million euros to it and also carries out specific actions such as the creation of an AGIPI Solidarity Covid-19 Fund of 10 million euros to help, outside of any contractual guarantee, our members, many medical professions who can no longer work. We also released 5 million euros to create a research platform for a vaccine against Covid-19. And we also offer 20,000 meals to hospital staff. In total, our efforts exceed 50 million euros.

But is it not low compared to the amounts brewed by your industry?

Absolutely not, because our efforts do not stop there. The contribution of our sector amounts to at least between 3 and 6 billion euros depending on the duration of the crisis. These 3 billion euros include the additional claims linked to this crisis, the solidarity commitments made by each of us, but also the uncashed premiums. Each of these three items represents around one billion euros of effort on the part of the sector. These 200 million are therefore only the visible part of everything we do and which is less so.

That is to say ?

We compensate our vulnerable clients such as people with long-term illness (ALD) and pregnant women who are on sick leave without having a medical certificate. Our 300,000 contractor and independent AXA insured clients benefit from the deferral of their premium payments during the confinement period, while retaining their guarantees. This could represent a shortfall of 150 million euros in premiums.

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Senators have questioned the government, comparing your contribution to an “alms”, in front of the 1,700 billion euros of life insurance outstanding that you manage…

Let's be clear. Insurance brings together two businesses: savings and risk. Life insurance being the preferred investment of the French, we manage a large part: 1,700 billion euros in outstandings. This savings belongs to the insured and not to the insurers, who do not make much money on these products. Insurance linked to risk management, on the other hand, generates 5 billion euros in profits per year. However, as we anticipate between 3 and 6 billion euros in losses for the whole sector because of the current crisis, this means that many players will undoubtedly encounter great difficulties this year.

Many professionals have subscribed to the operating loss guarantee. Why are they not compensated?

This warranty covers the consequences of a cessation of operation following a guaranteed event such as water damage or a fire. There are two exclusions, valid for all insurers: war and pandemic. Why? Insurance is based on two principles: mutualisation and hazard, that is to say that insurance cannot cover a risk which affects everyone at the same time and which is not linked to any hazard since it is consecutive to an administrative containment measure. This principle of mutualization can only work if there are valiant people who support the injured, only if a large proportion of contributors supports the small proportion of others, in difficulty, who will collect their contributions up to a thousand times. With almost all businesses and businesses almost at a standstill, it is not possible to use this principle of mutualisation. It was like during the bombing in 1945, entire cities were destroyed and could not be rebuilt by insurers. Such a situation is the responsibility of the State.

What would be the cost of such compensation?

Receipts from all French insurers for the operating loss guarantee amount to 300 million euros per year. However, we have calculated that all the operating losses suffered over three months by French companies - which are practically all at a standstill - would amount to 60 billion euros. Please understand that if we were to compensate for this operating loss, many insurers would file for bankruptcy. We can't afford it, we must put an end to all these fantasies!

When is the creation of a health catastrophe plan?

Today, this is neither provided for in our contracts, nor possible economically. But I would like us to be able to quickly set up a system comparable to that of natural disasters or major attacks with an abundance of insurers and the State. I call for everyone to come together around the table next week to discuss it. AXA will be an active contributor. But, it will be necessary to provide that the State takes over when the damage exceeds the understanding and that the insurers can no longer assume alone.

Source: leparis

All business articles on 2020-04-05

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