How Finnish insurance companies have avoided providing coverage for COVID-19

The outbreak of the pandemic and the containment measures that have been implemented to reduce its spread have caused losses that arguably pose new challenges to insurance companies operating in Finland. 

Jobs have been lost due to enforced closures, events have been cancelled en masse, travel plans have been shelved and, of course, health problems and loss of life have intensified. Under normal circumstances, all of these losses can be covered by the various types of insurance packages offered by Finland’s largest providers.

However, research into the various COVID-19 policies of each company reveals that the chance of a person, household, worker, or business actually receiving coverage of losses due to the pandemic depends largely on what insurance company they were with at the time.

All of Finland’s largest insurance providers have updated their policies since the beginning of the coronavirus outbreak. Some have explicitly stated what kind of losses they are willing to cover, while others have made it less clear.

We looked into the uneven patchwork of policies in Finland and spoke to some of the largest companies to try and get a better picture of the coverage and rights people have in the age of COVID-19. 

*Coverage may apply under specific circumstances and only if the appropriate insurance feature was included in the policy prior to the losses being incurred.

All of the largest insurance companies in Finland offer full sickness and life insurance coverage in the event of a policyholder contracting COVID-19. This means that, if a person incurs losses due to COVID-19 sickness or dies from it, their existing sickness and life insurance policies will kick in as normal.

However, it is worth noting that one major company, LähiTapiola, has explicitly updated its policy to state that parents who incur financial losses due to having to stay off work to look after a child who is sick with COVID-19 will not receive coverage. This, along with many other recent insurance policy updates, highlights how most companies are taking a somewhat reactive approach toward COVID-19 coverage.

Another factor that all of the companies surveyed had in common is that they have made it clear that they will not be providing business insurance coverage to customers who have had to close their business due to COVID-19 emergency restrictions. 

For the most part, the companies have updated their policy documents to explicitly mention that business closure caused by COVID-19 disruption has not and will not be covered in any circumstances, even if a business has specifically taken out epidemic insurance prior to COVID-19. Antti Huhtala, Chief Product Officer at Pohjola Insurance (OP), explained that for many businesses, the government-mandated shutdowns did not constitute an “imminent” threat to business owners.

“Unfortunately, in short, there is no proper coverage in a pandemic for smaller enterprises”, remarked Antti. “The insurance sector in Finland has not considered the possibility of a pandemic in the past and we have not been prepared… for restaurants, their situation has been terrible”.

OP does, however, offer coverage for cancelled events, providing that those businesses had specifically taken out event cancellation coverage.

Another large Finnish insurance group, Fennia, does not offer such coverage, with their spokesperson Mika Lydman explaining that “our business interruption insurance does not cover interruptions caused by the authorities’ decisions to minimise the spread of diseases by limiting public events, closing public spaces, or imposing travel restrictions for epidemic areas, nor does it cover losses caused by people changing their behaviour of their own accord”. 

In addition, Fennia’s spokesperson said that although event cancellation coverage will be decided on a “case-by-case basis”, they have not so far given any damages to customers who have suffered from COVID-19 related business closures.

For those companies that do offer epidemic insurance in their disaster coverage policies, this often applies in a very limited way, such as the coverage of any costs related to disinfecting a property. OP has stated that none of their customers have applied for their “disinfecting coverage”, while Fennia have said that they are currently processing for “some customers”.

Travel insurance coverage is also uneven across the major providers. IF provides travel cancellation coverage as long as the trip was scheduled between 13 March and 30 April, as well as repatriation costs of up to €2000 per policyholder.

Meanwhile, OP offers more extensive damages for cancelled travel, providing that the policyholder has taken out crisis insurance. LähiTapiola, on the other hand, does not provide any coverage for cancelled travel related to COVID-19, not even for at-risk individuals.

Many of the main providers are still taking steps to limit the economic pain felt by their customers. By April 2020, OP has granted payment relief on insurance fees to 87,000 customers since the start of the pandemic, equal to around €280 million. Fennia has similarly granted payment relief to customers who have lost income, while Pohjantahti has stopped charging rent to small businesses that use the properties that they own.

When researching for this piece, we also spoke to the Finnish Financial Supervisory Authority (FSA), which is responsible for the regulation of the insurance market and for consumer protection. The FSA’s Supervisory Manager, Timo Holopianen, urged any individuals or businesses who have experienced losses and worry about being unfairly denied coverage to always read the terms and conditions of their policy carefully, as they may find that they have a right to appeal.

Insurance companies are obligated to set out their own appeals process clearly and in detail. If this proves insufficient, policyholders may go to court, but Holopianen warned that this process can be costly and take several years. 

Instead, the FSA recommends that aggrieved customers lodge an appeal with the Finnish Financial Ombudsman Bureau (FINE), as these can deal with small claims and have specific expertise in insurance matters.

You can find further information on what options are available to those who feel they have been unfairly denied coverage or damages in English here.

Adam Oliver Smith – HT