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What’s the latest on business interruption claims?

 

In January this year, the supreme court ruled that policyholders could have their claims for coronavirus-related business interruption losses paid.

This has led to the FCA recently carrying out a test-case to see the progress insurers are making regarding payouts for coronavirus-related business interruption losses.

21,140 cases have been accepted by insurers, yet over 18,000 policyholders’ claims are pending, which means they’re still waiting to see if their claim is valid. Nearly 12000 claims do have all the information needed to calculate the value of the claim.

Over 2000 claims have had an initial/interim payment made to the policyholder or their representative totalling nearly £192,084,302, and over 8000 claims have been accepted and paid in full to the policyholder totalling £279,823,468.

 

The Data

 

We’ve taken a look at the test case data ourselves and thought we’d share how 5 of the bigger insurers in the UK (Aviva, AXA, Zurich, Allianz, and Covea) are progressing with business interruption claims related to COVID-19:

 

Aviva’s progress with business interruption claims

 

No. of claims accepted: 713

No. of claims pending: 425

No. of unsettled claims where an initial/interim payment has been made: 124

No. of claims where settlement has been made, accepted by the policyholder, and paid in full: 138

 

  • Aviva has the second-highest percentage of their total claims of the five selected insurers that have been accepted at 51%.
  • They have the third-highest percentage of total claims that are pending at 30%.
  • They have the highest percentage of initial/interim payments to policyholders at 9% of their total claims but the second from lowest percentage of full payouts at 10% of their total claims.

 

AXA’s progress with business interruption claims

 

No. of claims accepted: 1646

No. of claims pending: 2109

No. of unsettled claims where an initial/interim payment has been made: 393

No. of claims where settlement has been made, accepted by the policyholder, and paid in full: 921

 

  • Of the five selected insurers, AXA has the lowest percentage of their total claims that have been accepted at 32%.
  • They have the second-highest percentage of total claims that are pending at 42%.
  • They have the same percentage of initial/interim payments to policyholders as Zurich and Allianz at 8% and the third-highest percentage of full payouts at 18% of their total claims.

 

Zurich’s progress with business interruption claims

 

No. of claims accepted: 86

No. of claims pending: 81

No. of claims where the insurer has received all information needed: 71

No. of claims where settlement has been made, accepted by the policyholder, and paid in full: 2

 

  • Of the five selected insurers, Zurich has the second-lowest percentage of their total claims that have been accepted at 47%.
  • They have the highest percentage of total claims that are pending at 44%.
  • They have the same percentage of initial/interim payments to policyholders as AXA and Allianz at 8% and the third-highest percentage of full payouts at 18% of their total claims.

 

Allianz’s progress with business interruption claims

 

No. of claims accepted: 2352

No. of claims pending: 297

No. of unsettled claims where an initial/interim payment has been made: 379

No. of claims where settlement has been made, accepted by the policyholder, and paid in full: 1459

 

  • Of the five selected insurers, Allianz has the highest percentage of their total claims that have been accepted at 52%.
  • They have the lowest percentage of total claims that are pending at 7%.
  • They have the same percentage of initial/interim payments to policyholders as Zurich and AXA at 8% and the second-highest percentage of full payouts at 18% of their total claims.

 

Covea’s progress with business interruption claims

 

No. of claims accepted: 3210

No. of claims pending: 757

No. of unsettled claims where an initial/interim payment has been made: 114

No. of claims where settlement has been made, accepted by the policyholder, and paid in full: 2294

 

  • Of the five selected insurers, Covea has the third-highest percentage of their total claims that have been accepted at 50%.
  • They have the second-lowest percentage of total claims that are pending at 12%.
  • They have the lowest percentage of initial/interim payments to policyholders at 2% of their total claims but the highest percentage of full payouts at 36%% of their total claims.

 

If you want to see the data for yourself and see how other insurers are progressing with business interruption claims, click here and go to the FCA’s website and download the test case.

 

Business Insurance

 

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