Context
The FCA sent a Dear CEO letter to insurers affected by the business interruption insurance Test Case, which explained its intention to gather information on all non-damage BI policies that are, in principle, capable of responding to the coronavirus (Covid-19) pandemic. The letter set out the FCA’s intention to gather information from all affected insurers regularly on the progress of their non-damage BI claims, and to publish some of this data.
In March 2023 insurers submitted what the FCA expects to be the final iteration of data that will be collected and published on progress of on-damage BI claims. The FCA has been closely monitoring affected firms’ handling of BI claims since collection of this data began in March 2021.
Key points to note
What the data shows:
- The number of BI claims where the insurer’s decision as to whether there is a valid claim is pending is 341 (5th September 2022: 665).
- The aggregate value of the interim/initial payments made for the 1,074 (5th September 2022: 1,560) unsettled claims where such payments have been made is £294,949,957 (5th September 2022: £296,880,011).
- The aggregate value of the payments made for the 36,904 (5th September 2022: 34,506) claims where final settlements have been agreed and paid (see data note below) is £1,406,662,310 (5th September 2022: £1,213,945,175).
- This means that (at the point of this information submission) 37,978 (5th September 2022: 36,066) BI policyholders out of the 43,027 (5th September 2022: 42,586) who had had claims accepted, had received at least an interim payment.
The claims numbers reported as those where the insurer has received all the information needed to calculate the total value of the claim reflect the insurer’s view.
The FCA reminds firms of the need to handle claims promptly and fairly and to provide reasonable guidance to help policyholders to make a claim.
Next actions
None – for information and awareness.