ABI members expect to pay up to £2.5 billion for COVID-19 insurance claims incurred in 2020 according to the latest estimates from the Association of British Insurers published today.
The latest estimates include:
- £2 billion for COVID-19 business interruption claims.
- £204 million paid from Covid-19 related protection insurance claims, including life, critical illness, and income protection insurance claims.
- £152 million expected to be paid on travel insurance claims.
- £121 million expected to be paid across other general insurance products, including events, weddings, and liability insurance.
Of these claims:
- 123,000 claims have been settled with payment across all of the above business lines; a further 9,000 have received partial payments as of mid-January 2021.
- Over two-thirds of a billion pounds (£697 million) had been paid out for these claims as of mid-January 2021.
In addition, Lloyd’s previously estimated a £500 million cost of UK Covid claims, taking the current overall estimate up to £3 billion for UK Covid insurance claims.
Huw Evans, the ABI’s Director General, said:
“The Covid-19 pandemic is unprecedented in its impact and will be one of the biggest insured events of recent times. These latest estimates demonstrate the range of support ABI members expect to offer their customers as a result of Covid-19 related claims across a wide range of insurance policies. This data was collected from individual firms by the ABI in mid-late January, and millions of pounds continue to be paid out every week in claims settlements.
“The industry response also includes vital support to families who have lost a loved one to Covid who are receiving life insurance payments.
“However, we recognise the pandemic has also illustrated some uncomfortable gaps between what people expected to be covered for and what their policy was designed for. We need to learn lessons from this unprecedented event and redouble our efforts to improve consumers’ trust in insurance products.”
-ENDS-
Notes for Editors
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Sarah Aspinall 020 7216 7412 Mobile: 07725 245297
Notes on the data.
1. These estimates relate to UK claims incurred in 2020, as of mid-late Jan 2021, across Business Interruption, Travel, Events and Other GI insurance lines, as well as protection insurance including life, critical illness, and income protection policies. Note that Other includes a variety of product lines such as events, weddings, various types of liability insurance, other commercial lines business, financial lines and some accident and health products.
The general insurance figures are estimates and should be treated as such – they will be subject to a degree of variability over time as further claims are notified, existing claims develop, and the impact of externalities such as the Supreme Court BI ruling becoming resolved. There also exists a degree of uncertainty over classification of claims as ‘Covid-19 related’.
ABI Business Interruption and travel insurance estimates have been extrapolated to broadly represent all ABI Data providers for these lines, based on Gross Written Premiums in 2019. The ‘Other’ category has not been extrapolated, nor has the Protection claims data – this data represents participating ABI data providers only.
2. The Association of British Insurers is the voice of the UK’s world leading insurance and long-term savings industry. A productive, inclusive and thriving sector, we are an industry that provides peace of mind to households and businesses across the UK and powers the growth of local and regional economies by enabling trade, risk taking, investment and innovation.
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