Allianz Insurance has issued BI claims pay outs on 75% of valid claims

Allianz Insurance has confirmed that it has paid out on 75% of its valid business interruption (BI) claims – by the end of January 2021, this amounted to 1,832 interim and final claims payments.

These claims relate to the fallout from the Covid-19 pandemic, where many businesses were forced to close or reduce their operations due to the national lockdown regime implemented by the government.

Whether cover should be provided for Covid-19-related claims under BI policy wordings was recently decided through the FCA’s test case action, with the High Court issuing its initial judgment last September and the Supreme Court publishing its appeal decision in January.

Although Allianz was not one of the eight insurers involved in the original case, a number of different policy wordings and clauses were reviewed and the final rulings are applicable across the market.

Speaking on the steps Allianz has taken to address valid BI claims, Graham Gibson, chief claims officer, said: “Allianz has taken a fair and balanced view on submitted Covid claims, resulting in many payments being made.

“The Supreme Court ruling handed down on 15 January provided a degree of clarity and has endorsed the decisions Allianz has made to date.

“The judgment is very technically complex and it will take some time to digest what it means for each customer, however Allianz has identified a small number of claims potentially affected by the case and we have contacted all customers who are affected by the judgment in line with the FCA guidelines and have already been in touch with our brokers to explain our next steps.”

Claims uptick

Gibson noted that the attention garnered by the test case has led to “a significant increase in business interruption claims over the last three weeks” as business owners look to recoup their losses following the Supreme Court’s decision.

“Unfortunately, the reporting of the ruling has raised expectations amongst many small businesses in particular and Allianz has received a significant increase in business interruption claims over the last three weeks, the vast majority of which provide no cover,” he explained.

“Fortunately, we have established processes in place to deal with a surge in claims caused by any major event, including online communication and additional claims handler support, as and when our business requires it.”

Despite understanding the reasoning behind the increase in claims, Gibson emphasised that claims would only be paid “where the policy requirements are satisfied”.

He continued: “We are acutely aware that the coronavirus pandemic has had a severe impact on many of our policyholders and we have every sympathy with those affected.

“Allianz also understands that policyholders with BI cover will naturally wish to explore the question of whether or not it responds to the losses that they have suffered. Equally, however, it is vital for the functioning of such insurance and for the benefit of policyholders with valid claims that Allianz should only pay claims in cases where the policy requirements are satisfied.”