ABI’s initial estimates covers payments on the interruption of businesses, weddings policies, travel insurance, and scrapped school trips, all caused by the COVID-19 pandemic
ABI members expected to pay £1.2bn in COVID-19 claims. (Credit: Daniel Roberts from Pixabay)
The Association of British Insurers (ABI) said that its members are likely to pay out more than £1.2bn in claims to help businesses and individuals impacted by the COVID-19 outbreak.
The amount expected to be shelled out as per the ABI’s initial estimates covers payments on the interruption of businesses, wedding policies, travel insurance, and scrapped school trips, all caused by the pandemic.
The association said that its initial estimate is part of its response to the Treasury Select Committee, that defines how insurers continue to help their customers during the challenging conditions.
According to the ABI, the figure is a working estimate and that data is collected to provide a nearly complete picture as possible at this juncture. The association said that the figure has excluded claims made via Lloyd’s and the London Market which will be required to give a total figure for the UK market response.
Of the £1.2bn working estimate given by it, the ABI said £900m pertains to business interruption claims. An amount of £275m in total is expected to be paid to customers in cancellation claims on travel insurance, while £25m will be for claims related to wedding insurance, school trips, and events.
The working estimate announced by the ABI is in addition to the £363m amount that has been estimated to be paid to customers following the Ciara and Dennis storms that hit the UK earlier this year.
The association said that while most businesses would not have bought insurance to cover against Covid-19, for those that have claims, some are likely to be substantial.
ABI director general comments on the working estimate on COVID-19 claims
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 £1.2 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.”