New data from the Financial Conduct Authority (FCA) shows that to date more than £700 million has been paid out for claims related to the COVID-19 business interruption (BI) test case in the UK.
This represents an increase of more than £100 million on the £600 million that the FCA recorded roughly one month ago.
The latest data from the regulator, published today, shows that the aggregate value of the interim/initial payments made for the 3,632 unsettled claims where such payments have been made is £268,248,492, versus £247,689,535 on 2,898 claims as of April 6th.
Meanwhile, the value of payments made for the 13,895 claims where final settlements have been agreed and paid is £433,125,666, again compared with £352,101,391 on 10,772 claims last month.
This means that, at the point of this information submission, 17,527 BI policyholders (48%) out of the 36,414 who had had claims accepted, had received at least an interim payment, compared with 13,670 (39%) out of 35,438 previously.
But while progress is demonstrably being made towards resolving claims on a monthly basis, the FCA’s figures show that many major firms are still lagging behind their peers, with pay outs made on only a fractions of their total pending or approved claims.
Hiscox, for instance, has made final payouts on just 151, or 1.5% of its 9,814 pending or approved claims as at April 30th, with interim payments made on a further 1,068, or 10.9%.
Similarly, MS Amlin has made final pay outs on 333, or 8.4%, of the 3,968 claims between its MS Amlin Insurance SE and MS Amlin Underwriting Limited businesses, and interim payments on another 183, or 4.6%. Neither business has any claims still pending.
In January, the UK Supreme Court decided to uphold the judgement on the FCA’s BI insurance test case, which was first brough forward by the financial regulator in May 2020 to seek legal clarity on whether insurers were obligated to pay out on BI claims related to the COVID-19 pandemic.
After the UK High Court passed its long-awaited judgement on the FCA’s BI insurance test case in September 2020, ruling in favour of policyholders on the majority of key issues, the UK Supreme Court granted permission for the FCA and a group of insurance and reinsurance companies to appeal its ruling.
At the time of the Supreme Court’s ruling, analysts speculated that some 370,000 small businesses may have been affected by the outcome of the case, with a potential £3.7 billion to £7.4 billion of claims on the line.