Insurers pay 130 million euros to date on business interruption linked to Covid – Central Bank

Insurers operating in the Irish market have to date paid € 130 million in claims for business interruption resulting from the Covid-19 crisis, fueled by a historic court ruling and pressure from the Central Bank, depending on the regulator.

The Central Bank wrote to a number of insurers in February urging them to pay valid business interruption claims, following landmark judgments by UK and Irish courts in favor of businesses hit by the economic shock caused by Covid-19.

The UK Supreme Court ruled in January that a number of insurers – including Hiscox, RSA and QBE, which write business in the Republic – were required to pay out certain policies after the Financial Conduct Authority (FCA) of the country took a test case.

Dublin’s High Court ruled in February in favor of four publicans who challenged FBD over its refusal to pay for its advertising policy. FBD estimated that this would ultimately cost the company and its reinsurers a total of € 183 million in claims and expenses, as the judgment has ramifications for around 1,100 other pub insurance policyholders. At the end of June, he had already paid 20 million euros in provisional payments, while FBD awaits a court decision in December on the final amount of payments.

Central Bank Review

Central Bank chief financial officer Derville Rowland said at an insurance conference hosted by Deloitte on Wednesday that insurers had paid out € 130 million to 4,371 policyholders to date. This figure includes 3,485 claims that were fully settled and 886 that received interim payments.

A Central Bank review that began last year found that 27 companies were actively providing business interruption insurance coverage for infectious diseases in more than 200 individual policy names before the pandemic struck. While it was clear from the wording of many of these policies that Covid-19 was not covered, the bank identified 31,000 policies that “addressed the circumstances of business interruption or interference related to the Covid-19 epidemic in Ireland, “says Rowland.

Insurers were ordered to contact the 31,000 policyholders after the FBD decision in February and give details of how they could make a claim.

“Of course, it must be emphasized that while a policy may be reactive, it does not necessarily result in a complaint,” Ms. Rowland said. “Many policyholders will not make a claim because their activity may not have been interrupted; they may not have depended on their premises to continue doing business; or they may not have suffered losses as a result of Covid-19. “

For example, a number of responsive policies relate to essential retail businesses, healthcare and healthcare facilities, or owners of residential buildings that have not been subject to closure, she said.

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