UK Covid-19 claims grow as Australian insurers battle in court

Insurance payouts to UK businesses hit by the pandemic continue to rise after a test case, but any local resolution is mired in court action.

A boarded-up store in London. Picture: AFP

The latest data from the UK’s financial regulator reveals insurance payouts for the Covid-19 pandemic have grown to £467.25m ($A856m).

It follows a British court ruling that forced insurers to pay affected customers, and comes as Australian insurers continue to continue to contest claims for business interruption insurance.

At least 16,159 claims have now been fully paid out by British insurers, with another 4,188 unsettled, but having received interim payouts. Almost 37,702 claims have been submitted by affected businesses.

Australian-listed insurer QBE has received 2489 claims from UK customers but has only finalised two thirds of complete claims.

QBE has settled 651 of the 990 claims where full details of financial loss caused by the Covid-19 outbreak have been provided, up from 502 in May.

QBE had provisioned $240m to cover pandemic related claims arising from the UK.

The insurer has provisioned $US785m overall to cover pandemic-related claims.

Hiscox Insurance has received the largest number of claims from customers at almost 7346, according to June data.

However, Covea Insurance has fully settled the greatest number of customers, at 2483.

Payments from British insurers have now been flowing for several months, while Australian insurers are still locked in legal action in the courts in a bid to prevent claims.

A shopper in central London. Picture: AFP

British insurers were forced to pay affected customers after the Financial Conduct Regulator ran an omnibus case that examined the policies of several insurers.

The court found there were several areas under which businesses could claim for interruptions to their operations caused by the Covid-19 pandemic.

Australian insurers are continuing to contest attempts by business interruption insurance policy holders who are seeking payouts for economic damage inflicted by the pandemic.

The industry has appealed its loss in the NSW Supreme Court to the High Court, with a hearing set down for oral arguments on July 25.

A second round of test cases is currently underway, including a separate test case launched by QBE, which are unlikely to be resolved for months.

Law firm Gadens has also launched more than 20 cases in the Victorian Supreme Court in a bid to force insurers to pay claims.