New data from the Financial Conduct Authority (FCA) shows that total reported claims payments for policies related to the COVID-19 business interruption (BI) test case in the UK are now approaching £1 billion.
The aggregate value of the payments made for the 21,198 claims where final settlements have been agreed and paid is £636,799,954, as of August 5th.
And for interim/initial payments made for the 5,040 unsettled claims where payments have been made, the aggregate value is now £331,285,812.
These figures represent an increase of 12.4% and 7.3%, respectively, over the previous July update from the FCA, which put the aggregate value of final settlements at £566,604,710 and of interim/initial payments at £308,885,284.
Added together, total reported claims payments total £968.1 million, meaning insurers are fast approaching the £1 billion payout mark for policies related to the test case.
The latest update also shows that about 63.0%, or 26,238, of BI policyholders out of the 41,666 who have had claims accepted, had received at least an interim payment as of August 5th.
However, some insurers have still been slower than others to get their claims settled, with Hiscox and MS Amlin continuing to be among the main offenders.
Hiscox has now made final payments on 2,048, or 17.6%, of its 11,658 pending or approved claims, with initial payments made on a further 16.3%, or 1,897.
MS Amlin has similarly made full payouts on 1,166, or 30.3%, of the 3,849 claims approved between its MS Amlin Insurance SE and MS Amlin Underwriting Limited businesses, and interim payments on another 280, or 7.3%.
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.