January 27, 2023


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The eco decryption. Covid-19: banks and insurance companies must play the game

Two banking brands in Montpellier, November 9, 2017 (MICHAEL ESDOURRUBAILH / MAXPPP)

With the containment and the Covid-19 crisis, the government has extended aid to companies in difficulty. He considers that he has done his part, and today asks banks and insurance companies to do theirs.

For example, with the second wave of the epidemic, the government is extending the possibility for companies to take out a state-guaranteed loan until June 2021. It is up to the banks to be flexible by giving time to companies, or to postpone repayments, especially for those who need it, for an additional year. Minister of the Economy Bruno The Mayor asks banks to show solidarity in the coming weeks, since with the new health restrictions, companies will be further weakened.

Bruno The Mayor also turned to insurers. He is counting on them to create new insurance for businesses in the event of a health disaster. Here too, Bercy is pressuring and pushing the sector to find a specific system to cover companies, especially the smallest, facing the risk of a pandemic. Because this crisis has mostly shown the shortcomings, and we all remember the anger of small bosses who are not entitled to anything from insurance. Some have even taken the matter to court. But insurers explain that they will never be able to cover all the losses linked to Covid-19 or to pandemics, that would amount to bringing the sector to its knees.

But between all or nothing, Bercy asks them to find a way to be there, and by dint of discussions, a new insurance could emerge. We do not yet have all the outlines, but one thing is certain: this new device will be partly backed by the State, as is the case for natural disasters. The aid will also be capped or lump-sum, that is to say that it will not be able to cover the extent of the loss, but insurers will no longer be able to discard, they will have to assume part of the losses.

There will therefore be a sharing of risks between insurers and the State. But should this new insurance be compulsory ? This is the heart of the debate. If the guarantee is compulsory for all companies, it allows better mutualization between the smallest and the large groups, while setting up a kind of universal coverage. But if it is mandatory, it also means an additional burden for companies, and at the moment, it is difficult to be accepted. Bruno The Mayor receives on Friday 16 October the insurers to move this file forward. He hopes for an operational system as soon as 2021.