The insurance industry has shown resilience through the COVID-19 pandemic and stark predictions of business collapses have “not yet come to pass”, a law firm has stated in a clarification of previous comments.

As insuranceNEWS.com.au reported last week, Sparke Helmore commentary contained within a recently released Global Insurance Law Connect report raised the hackles of the local industry.

The local section of the report closed with the line: “It is almost certain that we will see insurance businesses fail, and quite possibly in significant numbers.”

But general insurance leaders, including Steadfast MD and CEO Robert Kelly, the National Insurance Brokers Association and Underwriting Agencies Council moved swiftly to counter the comments.

As a result of the backlash, Sparke Helmore released a further statement explaining that the report had actually been written in “late March”.

“At that point in time, predictions around potential impacts on many industries including the insurance sector, were concerning,” it said.

“The observations included in the report were based on those predictions and informed by anecdotal feedback from, as well as conversations with, a number of leading industry participants.”

However, it admits that “as we stand today, the severity of those predicted impacts has not yet come to pass in this country”.

“The insurance industry has been resilient and focused on compassionate support to those customers in the community experiencing financial hardship,” it said.

The statement does warn that “impacts could still play out in the travel, life, health, event cancellation and business interruption classes”. It also says business interruption coverage issues in Australia are “complex”.

“Given there are two very distinct sides to the argument, it is also inevitable that litigation could be the outcome more often than not and the small niche players – the particular subject of our comment on potential business failures – could be hit the hardest.”

See Analysis.