Hiscox lags behind peers on COVID BI payments claiming court delays

Insurer Hiscox is markedly lagging behind its peers when it comes to the final settlement of outstanding COVID-related non-damage business interruption claims, according to figures produced by the UK regulator.

The latest data released by the Financial Conduct Authority (FCA), which won a high-profile test case over these policies last December, shows that ­– as of 5 June – Hiscox Insurance Company has reached final settlement over its outstanding claims with regard to only 537 out of 7346 – or 7.3% of claims.

The 7346 figure represents the number of BI claims for COVID-19 related loss that have been accepted by the insurer, while the 537 statistic represents the number of BI claims where an offer of final settlement has been made, accepted by the policyholder, and paid in full.

By comparison, Allianz has reached such final settlement on 1834 out of 2377 claims (77%); Axis Managing Agency has reached final settlement on 2350 out of 3250 claims (72%); Arch Insurance (UK) on 719 out of 1238 (58%); Aviva on 823 out of 1532 claims (54%); RSA on 968 out of 2084 (46%); Axa on 1326 out of 3023 (44%); QBE UK on 649 out of 2433 (27%); and MS Amlin Underwriting on 621 out of 3275 (19%).

Covea, meanwhile, leads the settlement pack out of the major players with an impressive 2483 out of 2850 claims finally settled and paid in full (87%).

In January this year, the UK Supreme Court decided to uphold the judgement on the FCA’s BI insurance test case, which was first brought by the FCA  in order to seek legal clarity on whether insurers were obligated to pay out on BI claims related to the COVID-19 pandemic.

The Supreme Court also allowed all four of the FCA’s appeals (in two cases on a qualified basis), bringing positive news to policyholders across the country that had suffered business interruption losses as a result of the COVID-19 pandemic.

The UK High Court had previously ruled in favour of policyholders with regard to most of the most important issues.

The  proceedings were brought to determine issues of principle on policy coverage and causation under various specimen insurance wordings in respect of policyholder claims for business interruption losses arising in the context of the COVID-19 pandemic.

The FCA had previously estimated that some 370,000 policyholders could be affected by the judgment.

At least 60 insurers have or have had a stake in the long-running legal proceedings.

A spokesperson for Hiscox said: “Hiscox has nearly quadrupled the number of claims paid in the last month and made good progress in the number of claims that are now with a loss adjustor.  We are waiting on the final declarations from the Supreme Court which will give us certainty on the remaining pending claims. Business interruption claims are particularly complex and we will continue to work with customers to pay claims in line with the Supreme Court Judgment as quickly as possible.”

The 7346 figure represents the number of BI claims for COVID-19 related loss that have been accepted by the insurer, while the 537 statistic represents the number of BI claims where an offer of final settlement has been made, accepted by the policyholder, and paid in full.

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