Hollywood shutdowns to cost insurer millions
[MUNICH] Allianz, 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 (S$782.5 million) this year for coronavirus-related claims, with much of that coming from the entertainment industry. Filming of movies and television programmes in the US 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 US 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 announcing this week that it would temporarily suspend operations at all its US and UK venues. And television companies are scrambling to fill airtime, with the pipeline of programmes 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.
Mr 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.
SEE ALSO
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
BLOOMBERG
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Banking & Finance
Five new charges for money laundering accused Zhang Ruijin before his plead guilty mention
Bank of Japan keeps rates steady, projects inflation staying near 2% in coming years
Weak yen pressures Bank of Japan’s interest rate decision
Basel Committee adds climate risks to banking supervision standards
Crypto firm sues SEC to fend off oversight of Ethereum
Great Eastern chairman appeals for patience as shareholders fume over share price ‘disaster’