Brace for wave of le­gal ac­tion, Bea­z­ley warns em­ploy­ers

The Daily Telegraph - Business - - Business - By Michael O’Dwyer

‘In re­ces­sions, busi­nesses lay off more peo­ple and there­fore they get more dis­crim­i­na­tion claims’

EM­PLOY­ERS could be hit with a wave of dis­crim­i­na­tion claims as Covid lay­offs mount, an in­surer has warned.

Busi­nesses should brace for a surge in le­gal ac­tion as re­dun­dant work­ers claim they have been un­fairly dis­missed, em­ployer li­a­bil­ity provider Bea­z­ley says.

An avalanche of claims could trig­ger a mas­sive hit to in­sur­ance firms which are al­ready fac­ing tur­moil from other coron­avirus pay­outs and a plunge in the value of their in­vest­ments due to the stock mar­ket crash.

An­drew Hor­ton, the chief ex­ec­u­tive of Bea­z­ley, said: “Gen­er­ally in re­ces­sions, busi­nesses lay off more peo­ple and there­fore they get more dis­crim­i­na­tion claims.” Mr Hor­ton said that

Bea­z­ley was re­strict­ing the amount of em­ploy­ers’ li­a­bil­ity cover it sold to avoid a ma­jor fall­out.

Bea­z­ley, which also sells event can­cel­la­tion and pro­fes­sional in­dem­nity prod­ucts, fell to a pre-tax loss of nearly $14m (£11m) in the first half of 2020 – down from a $166m profit in the same pe­riod last year.

Net in­vest­ment in­come slumped to $83m from $170m a year ago but still beat City ex­pec­ta­tions. It has also axed its in­terim div­i­dend.

The FTSE 250 firm raised $300m from in­vestors in May to use as a buffer amid fears of $170m in claims aris­ing from Covid-19.

Bea­z­ley also in­tends to use the cash to drive growth as it seeks to cap­i­talise on ris­ing in­sur­ance pre­mi­ums.

The com­pany wrote nearly $1.7bn of new busi­ness in the first six months of the year.

That com­pared with less than $1.5bn in the first half of 2019.

Shares closed up 6pc at 456.4p.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.