Joining a movement of car insurers that are giving their policyholders a break during these trying times, Chubb (NYSE: CB) announced a wide-ranging discount for its clients.
Holders of Chubb personal car insurance policies are to be automatically granted a credit on their annual premiums once they renew them. This credit will amount to 35% of their premiums for both April and May. Further discounts might be in store in months after that, depending on how the situation with the SARS-CoV-2 coronavirus develops.
The rapid spread of the coronavirus has engendered "stay at home" mandates throughout the world, shut down businesses, and severely curtailed travel activities. With many people forced to remain in their residences, car traffic has declined notably throughout the U.S.
"We recognize that there has been a reduction in our clients' driving activity as a result of this pandemic," the company said in the press release announcing its move. "This credit reflects our commitment to providing a fair premium adjustment to our clients, while ensuring they continue to receive Chubb's best-in-class auto coverage."
Peer insurance companies used similar reasoning in announcing their own discounts. Earlier this month Allstate (ALL 3.13%) and Mercury General (MCY 0.59%) each declared they would provide a 15% refund on April and May premiums for their personal auto policyholders.
Chubb's shares were on the rise in early afternoon trading Tuesday, trading up by almost 1.4%. However, they were lagging behind the gains of many top stocks, and the key stock market indexes. Allstate, meanwhile, was generally keeping pace with the broader market, and Mercury was trading down slightly.