British giant Aviva said in a Q1 trading update that it expects take a £160m hit from claims related to Covid-19.
The firm estimates it will receive business interruption claims amounting to £200m, but that its exposure to paying out will be limited because most policies won’t include cover for Covid-19.
This is despite the fact that it is one of two insurers facing legal action from Hospitality Insurance Group Action – a conglomerate of businesses looking to get financial redress for their denied claims through the court system.
Aviva CEO Maurice Tulloch said: “Aviva had a solid first quarter of trading. General Insurance sales increased 3% and we had a strong performance in Life Insurance where new business increased 28%.
“Based on analysis as at 30 April, our estimate of the Covid-19 claims impact on general insurance, incorporating notified and projected claims, is £160m net of reinsurance.
“At 31 March, our estimated solvency ratio remains strong at 182% and incorporates Covid-19 related impacts.
“The economic outlook remains uncertain and will affect our business, however the strength of our capital and liquidity means we are well positioned to manage this crisis and continue to support our customers.”