Last month, Treasury Select Committee chair Mel Stride MP wrote to Association of British Insurers (ABI) director general Huw Evans to get a better understanding of how the industry has been responding to the coronavirus crisis. Now the ABI has provided the requested information, publishing its response on Saturday which includes expected payout amounts.
According to the trade body’s initial approximation, ABI members expect to pay out £900 million for business interruption claims, £275 million for cancellation claims on travel insurance, and £25 million for wedding insurance as well as cancelled school trips and events.
“We received 37 responses from members for a total of 40 different companies,” noted the trade body in its response. “The information provided in our submission is representative only of those members who have responded, rather than representing the industry as a whole.
“Member respondents to this request accounted for at least 80% of the total written premiums of ABI members for the product lines mentioned. The data is aggregated to provide as full a picture as we can at this stage, and this is supported by examples of how our members have been working with their customers to support them during this challenging time.”
The association said it will continue to work with the Treasury Select Committee as further data is collected. Meanwhile the over £1.2 billion working estimate does not include claims made through Lloyd’s and the London Market which the ABI said will be needed to provide a total figure for the UK market response.
Evans commented: “While many business owners are uninsured for pandemics, UK insurers still expect to pay over £1.2 billion in claims, making this a significant insured event. From paying all valid claims, to providing a range of extra help and support to customers, insurers are working hard to reassure and support policyholders through this uncertain period.
“However, we are also painfully aware that the majority of businesses are uninsured for global pandemics, as is the case throughout continental Europe and North America. Although ABI members expect to pay £900 million in business interruption claims, most policyholders are not covered for pandemic losses.”
The director general added that they strongly agree that public-private partnerships should be examined to find a lasting solution in enabling more affordable and extensive pandemic insurance cover to be available.
