The regulator calculated that 10,207 BI policyholders out of the 21,140 who have had claims accepted have received at least an interim payment
Following the Supreme Court decision in January around Covid-19-related business interruption (BI) claims, insurers have so far paid out just under £472m in interim and final BI claim payouts across 10,207 claims, according to new data published by the FCA.
In a ‘Dear CEO’ letter dated 22 January, the regulator outlined its aim to gather information on all non-damage business interruption policies that would be affected by the High Court and Supreme Court judgments – a list of the policies capable of responding to claims arising from the coronavirus pandemic was published on 12 March.
The same letter also confirmed that the FCA planned “to gather information from all affected insurers regularly on the progress of their non-damage BI claims and to publish some of this data”.
On 22 March, the FCA published its first round of submitted data from insurers, relating only to claims and complaints on non-damage BI policies that were directly affected by the test case, against its updated list of policies.
As reported to the FCA on 3 March, the aggregate value of interim or initial BI claim payouts for 2,030 unsettled claims is £192,084,302.
Meanwhile, the aggregate value of claim payouts for the 8,177 claims where a final settlement has been agreed and paid is £279,823,468.
The FCA calculated that this means 10,207 BI policyholders out of the 21,140 who have had claims accepted have received at least an interim payment.
Some firms submitted a ‘nil return’ response to the FCA’s data request because they did not have any policies within its scope. The regulator was specifically collecting data on policies:
- Which are, in principle, capable of responding to the Covid-19 pandemic.
- Which do not represent contracts of large risk.
- Where more than five claims have been made.
Capable of responding
However, the FCA did also note that “some insurers may have reached different conclusions on whether similar policies are, in principle, capable of responding to the Covid-19 pandemic.
“This is particularly the case for policies which require the policyholder to prove the presence of coronavirus at the premises.
“This may affect the number of accepted and pending claims that some insurers have reported. We will work with relevant insurers to ensure consistency in future reporting and will gather and publish this data each month.”
The FCA further reminded insurers “of the need to handle claims promptly and fairly and to provide reasonable guidance to help a policyholder to make a claim”.