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 have now exceeded £1 billion.
The aggregate value of the payments made for the 22,680 claims where final settlements have been agreed and paid is £696,244,085, as of September 5th.
And for interim/initial payments made for the 4,568 unsettled claims where payments have been made, the aggregate value is now £328,908,143.
This means total payments made now come to £1.03 billion, representing an increase of 5.9% on the £968,085,766 that had been paid when the FCA’s August data was released.
What’s more, nearly two-thirds, or 27,248 (64%), of the 42,308 BI policyholders that have had claims accepted have now received at least an interim payment.
However, as we have highlighted alongside the data from previous months, some insurers continue to pay out on claims at a far slower rate than these averages suggest.
Hiscox, for instance, has made full payments on 2,606, or 27.1% of its total accepted claims, with interim payments made on a further 1,859, or 19.4%, according to the latest data from the FCA.
Likewise MS Amlin has made full payouts on 1,395, or 36.3%, of the 3,841 claims approved between its MS Amlin Insurance SE and MS Amlin Underwriting Limited businesses, and interim payments on another 191, or 5.0%.
With the claims processing period now a full year on from the original legal ruling on the COVID BI case brought forward by the FCA, and nine months on from the verdict that upheld this judgement, many may now be questioning why some insurers are yet to make even initial payments to the majority businesses that rely on them.
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.