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Insurers settle £105mn of Covid-19 BI claims over last month: FCA

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More than £100mn ($134mn) of UK Covid-19 BI claims were settled in full by insurers during the month to 5 November, according to the latest monthly data from the Financial Conduct Authority (FCA).

This figure represents a significant increase of £35mn on the previous month, when £70mn worth of final settlements were paid out.

The information released yesterday disclosed that final settlements in respect of 1,435 claims had been agreed over the most recent reporting period, with 61% of all claims accepted by firms now fully settled.

The absolute number of claims settled in this period was lower than the number settled during the month to 5 October – 1,783 – but the average value of those final settlements increased to £73,153 from £39,458 last month.

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.

In aggregate, £872mn has now been paid out to policyholders in respect of claims where final settlements have been agreed. As of 5 November, a further £312mn of interim payments had also been made in respect of unsettled claims.

As insurers continue to work through a backlog of possible claims, the number of BI claims accepted increased by 394 to a total of 42,616. At the most recent reporting date, there remained 3,821 claims where the firm’s decision as to whether it is valid are pending.

Just over half of these remaining pending claims – 1,931 – have been submitted to Hiscox Insurance Company.

The firm, which also accounts for one-quarter of all accepted claims to date, is continuing to make progress with its final settlements after starting out at a slower rate than its peers.

According to the data released on 5 November, Hiscox has now settled 37% of its accepted claims in full, an increase on the 34% it had settled at 5 October.

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