New data from the Financial Conduct Authority (FCA) shows that the total reported claims payments for policies related to the COVID-19 business interruption (BI) test case in the UK are now approaching £1.3 billion, 12 months on from the Supreme Court’s final ruling on the case.
The data shows that, as of January 7th, the aggregate value of the payments made for the 29,027 claims where final settlements have been agreed and paid is £967,987,042.
And for interim/initial payments made for the 3,358 unsettled claims where payments have been made, the aggregate value is now £329,415,795.
This means that total payments made now amount to £1.297 billion, representing an increase of 5.9% on the £1.225 billion that had been paid when the FCA’s December data was released last month.
Now one year into the official claims-paying process, the FCA reports that 32,385, or 75.6%, of the 42,842BI policyholders that have had claims accepted have now received at least an interim payment.
In January of 2021, 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.
Recently, the federal court in Australia decided to rule in the other direction on business interruption issues, siding with insurers on eight out of the nine matters brought forward as part of its national test case.
