French insurers have committed to refrain from raising premiums next year on companies in the sectors hardest hit by the coronavirus outbreak, French Finance Minister Bruno Le Maire said on Monday.
Under pressure from Le Maire, insurers faced the prospect of being hit by a 1.2 billion euro ($1.45 billion) tax if they did not offer to keep premiums steady next year.
Le Maire, who had been concerned some insurers were preparing to hike premiums, said the freeze would benefit hotels, restaurants and bars as well as firms in the tourism, sports, culture and events industries.
“We hope that this constructive, useful and efficient agreement will end the conflict situation and bring solidarity to the sector,” Le Maire said after a meeting with insurance industry executives.
Le Maire has repeatedly clashed this year with the insurance industry, which he has said was not doing enough to ease the pain of businesses struggling to cope with the fallout of the coronavirus outbreak.
The Senate added last week an amendment to the 2021 budget bill to levy a 1.2 billion euro tax on the insurance sector, which would have needed approval in the lower house parliament to be retained.
Le Maire said at the time that if insurers did not commit to freeze premiums by Monday, the lower house parliament, where the government’s party has a majority, would go along with the tax.
Axa France CEO Jacques de Peretti hit out at the Senate’s tax amendment, telling Le Parisien newspaper that “it is scandalous to face such blackmail”.
Earlier this month, Axa warned of a hit to its 2020 results as a result of the pandemic, which has led it to make payouts to customers including for cancelled events.