Coronavirus (COVID-19) - ABI estimate £1.2bn claims in response to Data Request

On 27 April 2020, the Association of British Insurers (ABI) published its response to Treasury Select Committee Data Request of 25 March 2020, estimating £1.2bn will be paid in claims to businesses and individuals affected by coronavirus (COVID-19).

It is to be noted that this figure does not include claims through Lloyd's of London and London market.

This includes £900m in business interruption claims, £275m in travel cancellation and £25m across wedding insurance, school trips and events. This is in addition to the estimated £363m that will be paid to customers following Storms Ciara and Dennis.

The ABI notes that most businesses did not purchase insurance to cover coronavirus , and their losses will be substantial.

The ABI also stressed:

• insurers have not been collecting premiums and therefore building up reserves that enable them to pay claims for businesses that do not have insurance in place to cover them for coronavirus losses

• no country is able to provide widespread pandemic insurance and whether cover for pandemics can be provided through an insurance model is an important debate in for the future

• insurers continue to offer policy extensions, waiving restrictions and supporting customers across the full range of insurance products. Only 4% of products were withdrawn in March 2020, and all members who responded are being flexible to make payments and to support or advise customers as much as possible

ABI Director General, Huw Evans, said 'This is an unprecedented event, and insurers recognise that it is a very worrying time for everyone. While many business owners are uninsured for pandemics, UK insurers still expect to pay over £1.2bn 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 £900m in business interruption claims, most policyholders are not covered for pandemic losses. We agree strongly that the UK should examine public-private partnerships to find a lasting solution, to enable more affordable, more extensive pandemic insurance cover to be available to those firms who want it'.

Read the ABI Response to Treasury Select Committee Data Request (April 2020) here.

Source: Covid-19: Payouts of over £1.2 billion likely to be made to customers according to latest estimate from the ABI

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