LONDON::
The total cost of payouts made by U.K. carriers for post-test-case COVID-19-related business interruption claims has escalated to £756.8 ($1.07 billion) with just over one-half of the claims paid, according to the latest data from the Financial Conduct Authority(FCA).
Aggregate claims paid has risen by 7.9% since the last FCA report, which showed £701.4 million in claims paid. Insurers have made initial or final payments on 53.97% of BI claims that have been accepted by the carriers.
About £467.3 million in total payments have been made for BI claims where final settlements have been agreed to and paid, and £289.6 million for initial or interim payments that are unsettled and where an initial or interim payment has been made, according to statistics released by the FCA. The statistics were final as of June 5.
The payments are being made after the U.K. Supreme Court ruled in a BI test case in April. It found insurers are liable for the COVID-19-related business interruption claims of about 370,000 policyholders under policies written before the outbreak and never designed to cover pandemic claims.
The Supreme Court ruled on an appeal brought from the U.K. high court, which also sided with policyholders. In some areas, the Supreme Court expanded cover allowed under the BI policies.
The FCA did not provide specific insurer payouts for the aggregate costs, but did release how each carrier was handling its portion of claims. The FCA report listed 49 carriers that were processing BI claims impacted by the court ruling.
In total, 16,159 claims have been paid in full out of 37,702 claims that have been accepted by insurers for a final clearance rate of 42.86%.
Hiscox Insurance Co., with 7,346 claims and 537 claims where an offer of final settlement has been made, accepted by the policyholder, and paid in full, has the lowest clearance rate of 7.31%. Of insurers with more than 1,000 accepted claims, Covea Insurance plc, with 2,850 accepted claims, has the best clearance rate of 87.12%, according to the FCA.
MS Amlin Underwriting Ltd. has 3,275 claims, with 18.96% claims resolved; QBE UK Ltd., 2,433 claims, 26.67%; and Axa Insurance UK plc, 3,023 claims, 43.86% claims resolved.
Attempts to reach the carriers for comment were unsuccessful.