British insurers are on the hook for more than 1.2 billion pounds ($1.5 billion) in claims from businesses and individuals hit by the coronavirus pandemic, according to the industry’s trade body.
Initial estimates put payments for business interruption at 900 million pounds, followed by a record 275 million-pound payout for canceled travel, the Association of British Insurers said Saturday in response to a request for information from Parliament’s Treasury Committee. Everything from disrupted school trips to postponed weddings will also incur charges, it said.
The working figures exclude claims issued via Lloyd’s and the London Market, which would provide a more complete picture of the U.K. market liability in the pandemic-induced crisis.
Lawmakers are heaping pressure onto the insurance industry to ensure fair treatment of customers. The U.K. markets regulator told insurers to pay valid claims quickly last week, spurring a sell-off in the sector. The warning came after insurer Hiscox Ltd. rejected claims filed by policy holders who had coverage for business interruptions caused by the virus. Those policy holders appealed to the regulator, which is reviewing the matter.
“We are concerned that the insurance sector goes the extra mile in meeting claims wherever possible, for example where there may be gray areas within policies,” Mel Stride, chairman of the Treasury Committee, said in a statement on Saturday.
The ABI noted that only 4% of insurance products had been withdrawn last month, adding that insurers were being flexible over premium payments.
–With assistance from Benjamin Robertson.
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