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Carriers settle £70mn of UK Covid-19 BI claims as final payments rise

Coronavirus - Thu Apr 9, 2020

UK insurers settled £70mn ($96.3mn) of BI claims stemming from the Covid-19 pandemic in full over the last month, according to the latest monthly data from the Financial Conduct Authority (FCA) that shows an acceleration of final payments.

The regulator’s release disclosed that final settlements in respect of 1,783 claims had been agreed during the month to 5 October – a 20% increase on the previous month, when 1,482 claims worth £59mn in total were fully settled.

The total number of accepted claims was stable month on month at just over 42,000, and the number of cases where a decision on whether the claim is valid is pending fell by 668 to 4,536.

Overall, the figures indicate that the inflow of claims is stabilising, though policyholders are yet to receive any payment in respect to 13,356 accepted claims – equivalent to 32% of all accepted claims compiled by the FCA.

In aggregate, 58% of accepted claims have now been fully settled and in total, around £1.09bn has been paid out via full and interim settlements so far.

The FCA continues to publish monthly updates on the progress of BI claims payments, following the conclusion of the test case into the issue of BI cover during the pandemic, which progressed to the Supreme Court and found substantially in favour of policyholders.

There remain, however, some UK Covid-19-related cases where significant legal issues need to be addressed.

In one case, the Stonegate Group has launched an £845mn ($1.16bn) legal action in the High Court against MS Amlin, Liberty Mutual and Zurich for a policy that the carriers claim has a maximum liability of £17.5mn.

The claimant is arguing that the BI policy was triggered “multiple times” across its various pubs and restaurants.

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