Context
In January 2021 the FCA issued a Dear CEO letter to insurers affected by the business interruption insurance Test Case. The letter explained that the FCA intended to gather information on all non-damage BI policies capable, in principle, of responding to the coronavirus (Covid-19) pandemic. A list of updated non-damage business interruption policies was published on 27th May 2021. Within the letter it also set out the 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.
The data submitted by insurers on their progress with BI claims, which the FCA has decided to publish, includes the number of:
- BI claims where the insurer has received all the information required to enable them to calculate the total value of the claim
- BI claims for Covid-19 related loss that have been accepted
- BI claims where the insurer’s decision as to whether there is a valid claim is pending
- Unsettled BI claims where an interim/initial payment has been made to the policyholder or their representative
- BI claims where an offer of final settlement has been made, accepted by the policyholder, and paid in full
Where firms don’t have any policies within the scope of the data request nil returns were provided.
Key points to note
The figures published include:
- The aggregate value of the interim/initial payments made for the 2,798 (7th February: 3,029) unsettled claims where such payments have been made is £303,052,465 (7th February: £307,867,384).
- The aggregate value of the payments made for the 31,478 (7th February: 30,176) claims where final settlements have been agreed and paid (see data note here) is £1,046,446,929 (7 February: £1,006,918,766).
- This means that, at the point of this information submission, 34,276 (7th February: 33,205) BI policyholders out of the 42,340 (7th February: 42,307) who had had claims accepted, had received at least an interim payment.
Next actions
This is provided for information, however firms involved in dealing with BI claims should be aware of the data and keep the results in mind when considering their claims handling processes.