What Could the Exit of Catholic Church Insurance Mean for the Wider Market?

September 18, 2024 - 4 minutes read

Catholic Church Insurance (CCI) voluntarily entered into ‘run-off’ in 2023, effectively winding down its operations.
This could have ongoing implications for both the insurance market and care services.

How and why this occurred

Following the wind-up of the Royal Commission into Child Sex Abuse, the sheer volume of historic abuse claims led to a high demand on CCI’s existing capital reserves. The organisation also struggled to get sufficient injections of new capital.

Entering into run-off means that while CCI will still settle claims on existing policies, it will not provide new policies, nor will it renew existing policies once they expire.

In November 2023 CCI also entered into a Scheme of Arrangement to help avoid formal insolvency.

What will this do to the wider market?

Some insurance commentators think that CCI’s withdrawal could have significant impacts on the market, for both insurance cover and the provision of charitable/not-for-profit services.

Here’s why:

  • Potential lack of cover – CCI was one of the few insurers willing to provide cover for sexual abuse, so their exit will leave a void in the market.
  • Pricing pressures – after the Royal Commission, insurers began leaving the market due to the volume and frequency of claims. Now that CCI is leaving there will likely be further pricing and capacity pressures.
  • Reduction of services – some providers (e.g. in family and disability support) have been terminating services due to the unavailability or high price of cover.
  • The need for tighter child care procedures – organisations that are involved in working with children and other vulnerable people will need to take stringent measures to increase safety and reduce risks (see below for more on this).

CofC Insurance continues to provide cover. However, the ‘Known Offenders Exclusion’ applies – which is where the policyholder knew (or should have known) that a person in their employ had a history of offending.

Creating a safe organisation

A principal finding of Royal Commission was that many institutions that work with children had inadequate or inconsistent procedures for protecting children in their care. Many organisations were also shown to have responded inadequately to claims of abuse.

This led to a national prevention strategy to improve child protection and how we respond to abuse allegations, and to create greater consistency in these matters across the country.

In turn, this resulted in the development of ten National Principles for Child Safe Organisations. The Principles cover numerous aspects of child safety – including embedding child safety into your organisation’s culture, allowing young people to participate in decisions that affect them, screening and training employees and volunteers who work with children, and conducting continual reviews regarding child safety.

Our previous article covers the National Principles in more detail, including how you can implement them in your church or charity.

Making your church as safe as possible helps prevent offences occurring in the first place and reduces the risk of costly claims. Get in touch with our team for more assistance regarding child safety in your organisation and/or to discuss your insurance policy.

Further reading

Written by Tess Oliver

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