The FCA calculates that 23,933 policyholders out of 40,531 who have had BI claims linked to the test case action accepted have received at least an interim payment so far

Since the Supreme Court’s decision in January for the FCA’s test case around Covid-19-related business interruption (BI) claims, a total of £875,489,994 has been paid out by insurers for either interim or final BI claims payments across 23,933 claims, according to updated data published by the FCA yesterday (13 July 2021).

In a ‘Dear CEO’ letter dated 22 January, the regulator outlined its aim to gather information on all non-damage business interruption policies that would be affected by the High Court and Supreme Court judgments – a list of the policies capable of responding to claims arising from the coronavirus pandemic was published on 12 March.

iceberg

Read more…Briefing: Test case was tip of the iceberg as insurers continue to wade through BI claims

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The same letter also confirmed that the FCA planned “to gather information from all affected insurers regularly on the progress of their non-damage BI claims and to publish some of this data”.

So far, this data has been published on a monthly basis since March.

Clocking up claims payments

The regulator’s most current figures, which relate only to claims and complaints on non-damage BI policies that were directly affected by the test case, against its updated list of policies, found that as reported on 5 July 2021, the aggregate value of interim or initial payments that have been made for 4,975 unsettled claims amounted to £308,885,284.

This compares to 4,188 identified unsettled claims reported on 5 June that received interim or initial payments totalling £289,595,404.

Meanwhile, the aggregate value of agreed final settlements that have been paid across 18,958 BI claims was £566,604,710 as at 5 July 2021.

By comparison, on 5 June, 16,159 claims had final settlements agreed and paid, amounting to £467,251,258.

The FCA calculated that on 5 July, 23,933 BI policyholders out of 40,531 who have had their claims accepted have received at least an interim payment from their insurer.

Some firms submitted a ‘nil return’ response to the FCA’s data request because they did not have any policies within its scope. The regulator was specifically collecting data on policies:

  • Which are, in principle, capable of responding to the Covid-19 pandemic.
  • Which do not represent contracts of large risk.
  • Where more than five claims have been made.

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