MOD to cover personal life and injury insurance bill up to £150m for troops deployed on operations
The Ministry of Defence (MOD) is set to foot an insurance bill that could potentially be worth up to £150m as there is "no appetite" within the insurance market to provide policy cover for troops being sent to war zones.
Up to 60,000 Armed Forces personnel and civil servants deployed on operations will continue to be able to access personal accident and life insurance after a deal was brokered between the MOD and its previous insurer American International Group.
The MOD said that during the process of retendering contracts for service personnel, its broker "confirmed very late in the process – in the middle of May – that there is no appetite within the insurance market to provide policy cover for war risks without a contingent liability from the MOD".
"This was unexpected and has not previously been the case; the broker attributes this to a limited reinsurance market as a result of global world events (including in Ukraine)," the MOD statement added.
In a written statement, the Minister for Defence People and Veterans Dr Andrew Murrison said: "In keeping with the Armed Forces Covenant, the Ministry of Defence is committed to ensuring that service personnel are not disadvantaged in their ability to access privately arranged personal accident and life insurance due to their employment.
"That is why this contract is so important; to make sure that our people have that option available to them."
The MOD noted that a realistic worst-case estimate is £30m per annum for the five years of the contract and that the contingent liability was modelled using historic data on claims made during the height of the wars in Iraq and Afghanistan.
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