UK insurers settle over £750m of COVID-related BI claims

Since the UK Supreme Court’s January decision in the FCA’s test case around COVID-19-related business interruption (BI) claims, a total of £756.85m has been paid out by insurers for either interim or final BI claims payments across 20,347 claims, according to updated data published by the FCA.

The regulator’s most current figures, which relate only to claims and complaints on non-damage BI policies that were directly affected by the test case, against its updated list of policies, found that as reported on 5 June 2021, the aggregate value of agreed final settlements that have been paid across 16,159 BI claims was £467m as at 5 June 2021. 

Meanwhile, the aggregate value of interim or initial payments that have been made for 4,188 unsettled claims amounting to £290m.

This compares to 3,632 identified unsettled claims reported on 5 May that received interim or initial payments totalling £268m.

The data also reveals that Hiscox has more than double the number of COVID-related BI claims in comparison to its peers, with accepted claims totalling 7,400. The insurer has 2,768 case which are pending a decision as to whether the claim is valid. 

For the test case, the Financial Conduct Authority represented policyholders against eight insurance firms, which had argued that the pandemic was not a valid reason for paying out on business interruption policies.

Following the Supreme Court judgment, the CEO of the British Insurance Brokers’ Association (BIBA), Steve White, urged insurers to “act swiftly to settle claims fairly”.