After the FCA's test case, UK policyholders have been claiming against their business interruption insurance. The amount has totalled £470m so far.
Noted that the premise of the claims are ultimately different but in terms of scale, 'a total of £332.4 million was paid in December 2019 to customers in relation to PPI they were sold'. Reports also suggest that the total (cumulative) amount of PPI claims exceeded £50bn by 2020. By comparison, last June, the FCA's initial estimate of the total claims that could arise from the test case was £1.2bn.
The FCA have urged for business interruption payments to be dealt with quickly. However, there are still a large number of pending claims.
Do you think this will present a challenge for firms' claims handling obligations going forward?
More than 10,000 UK policyholders affected by January’s Supreme Court judgment on Covid-related business interruption insurance claims have already received some money, with the total paid out so far topping £470m. The Financial Conduct Authority, which brought the successful test case, released the first batch of data on Monday based on submissions from insurers — setting out how many claims relating to the case had been accepted and paid by the beginning of March. The data mark the first stage of resolution to a bruising dispute between some insurance providers and small and medium-sized companies over whether business-interruption policies should pay out for pandemic-related losses. Even industry executives concede the episode has done damage to the sector’s reputation.