Covid BI claims payments hit £765.8m

Insurers have paid out over £765.8m in Covid-19 related business interruption claims since the conclusion of the test case, according to a fresh set of data from the Financial Conduct Authority (FCA).

The regulator revealed that providers had made initial payments for unsettled claims worth £289.5m and final settlements of £467.2m as of 5 June 2021.

Last month, FCA data showed that insurers had paid out a total of over £701m as of 5 May 2021, including £268.2m in interim payments and £433.1m in final settlements.

The watchdog further noted that 20,347 (May: 17,527) of BI policyholders who have had claims accepted have received at least an interim payment. In total, 37,702 (May: 36,414) have had claims accepted.

Data
The updated figures reveal that Hiscox still has the highest number of claims that have been accepted, going up to 7,346 from 6,692 in May.

The provider’s interim payments have gone up from 1,068 claims to 1,469, and it also managed to triple its final settlements for the second month in a row, going from 151 claims to 537.

MS Amlin Underwriting came in second with 3,275 accepted claims, tightly followed by Axis Managing Agency (3,250) and Axa Insurance (3,023), with Covéa falling close behind at 2,850.

Covéa swapped places with Axis again as the provider that managed to actually pay out the most claims so far, resolving 2,483 claims, while Axis came in at 2,350.

The test case involved eight insurers - Arch, Argenta, Ecclesiastical, Hiscox, MS Amlin, QBE, RSA, and Zurich- and was issued after the Supreme Court ruled in favour of the FCA and policyholders in January, dismissing appeals made by insurers.

For the other providers involved in the court proceedings, data shows claims processing is slowly improving for some providers, with Arch having accepted 1,238 claims. However, the number of claims which have been paid in full since May has stagnated at 719.

Argenta has accepted 1,040 claims and paid out 554, while Ecclesiastical has paid out 13 claims in full, out of a total of 39.

QBE UK has settled 649 claims out of 2,433, and RSA also made progress, paying out 968 of its 2,084 claims.

Zurich has paid out five claims in April but has not reported any more settlements since then.

The data further showed that 9,152 (May 9,912) of policyholders’ claims are still pending.

Claims
As Insurance Age has detailed in previous reports, the FCA executive director Sheldon Mills has called for a reassessment of claims and urged firms to settle valid BI claims.

In a letter sent to providers in January, the regulator explained: “We encourage all insurers to do so as quickly as possible. In some cases, the judgment will mean that previously rejected claims (and complaints) are now valid or that the value of customers’ valid claims will have changed. “

We expect you to be clear on these points and on your next steps as you write to all your policyholders with affected claims or complaints over the coming week.”

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