Since the Supreme Court’s January decision in the FCA’s test case around Covid-19-related business interruption (BI) claims, a total of £599,790,926 has been paid out by insurers for either interim or final BI claims payments across 13,670 claims, according to updated data by the FCA.
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.
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”.
On 22 March, the FCA published its first round of submitted data from insurers, relating only to claims and complaints on non-damage BI policies that were directly affected by the test case, against its updated list of policies. This was based on figures submitted by insurers by 3 March.
Yesterday (13 April), the FCA updated these numbers based on information from insurers submitted by 6 April 2021.
This showed that unsettled BI claims have grown from 2,030 in March to 2,898 this month, with an aggregated £247,689,535 being paid out by insurers in interim or initial payments for these claims. This compares to the £192,084,302 that was paid out in interim or initial payments for unsettled claims as of 3 March.
Claims where final BI settlements have been agreed has also increased, from 8,177 in March to 10,772 one month later. As at 6 April, these final settlements amounted to £352,191,391, versus £279,823,468 last month.
The FCA therefore calculated that as of 6 April 2021, 13,670 BI policyholders out of the 35,438 who have had claims accepted have received at least an interim payment.
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.