Insurers are ramping up their response to the coronavirus pandemic, with the Insurance Council of Australia (ICA) declaring the COVID-19 respiratory illness outbreak an insurance catastrophe.

It is the first time a pandemic has been designated a catastrophe, the ICA confirmed. The announcement came as the World Health Organisation (WHO) labelled the outbreak a pandemic, with more than 118,000 cases in 114 countries and at least 4291 deaths.

Australia has 126 confirmed COVID-19 cases as of today, according to the Department of Health, and the Morrison Government has unveiled a $17.6 billion relief package to contain the economic fallout.

As per ICA protocols after a catastrophe declaration, additional resources will be made available to speed up insurance claims processing and a taskforce set up to oversee the process.

“That taskforce is made up of members or representatives from Insurance Council membership and is there to help identify and then resolve any issues that might arise,” spokesman Campbell Fuller told insuranceNEWS.com.au.

He says the taskforce aims also to “ensure that the information provided to governments and other important stakeholders is accurate and timely and that includes collecting and collating data across the industry”.

ICA Head of Risk and Operations Karl Sullivan says in a LinkedIn post the pandemic taskforce will focus on travel insurance and business interruption covers.

The council says the extent of claims and losses are unknown at this point.

Most travel and business interruption insurance policies contain exclusions for infectious diseases, pandemics, epidemics and/or known events, according to ICA.

In 2005/2006, the global insurance industry started to introduce general exclusions for business interruption-related losses linked to quarantinable diseases.

The coronavirus outbreak became a known event around January 20-31 for most travel insurers.

According to the WHO, this is the first pandemic caused by a coronavirus.

“We have never before seen a pandemic sparked by a coronavirus,” Director-General Tedros Adhanom Ghebreyesus said. “WHO has been assessing this outbreak around the clock and we are deeply concerned both by the alarming levels of spread and severity, and by the alarming levels of inaction.

“We have therefore made the assessment that COVID-19 can be characterised as a pandemic.”