UK BI test case judgement will take some time to digest: Allianz chief claims officer

Allianz Insurance's chief claims officer Graham Gibson has said that the company has seen a "significant" surge in business interruption (BI) claims received after the  Supreme Court's ruling in the FCA test case, noting that the "technically complex" judgement has somewhat increased small businesses' expectations but is taking insurers time to digest.

On January 15, the UK’s highest court ruled largely in favour of policyholders, deciding that most of the disease clauses provided cover for losses connected to COVID-19.

While the judgement provided a degree of clarity on the issue, Allianz noted that it also raised expectations amongst many small businesses to explore whether or not their policy responds to the losses that they have suffered.

"Allianz has received a significant increase in business interruption claims over the last three weeks, the vast majority of which provide no cover," said Gibson. "Unfortunately, the reporting of the ruling has raised expectations amongst many small businesses."

Gibson said that although Allianz has taken a fair and balanced view on the submitted COVID-19 claims, resulting in many payments being made, it believes "the judgement is very technically complex and it will take some time to digest what it means for each customer".

At the end of January 2021, a total of 1832 interim and final claims payments had been made to customers, representing 75 percent of the total number of covered claims, the insurer has revealed.

Gibson said the company has identified a small number of claims potentially affected by the case and contacted all customers who are affected by the judgement in line with the FCA guidelines and are in touch with its brokers to explain the next steps.

“We are acutely aware that the coronavirus pandemic has had a severe impact on many of our policyholders and we have every sympathy with those affected. Allianz also understands that policyholders with BI cover will naturally wish to explore the question of whether or not it responds to the losses that they have suffered.

"However, it is vital for the functioning of such insurance and for the benefit of policyholders with valid claims that Allianz should only pay claims in cases where the policy requirements are satisfied,” he concluded.

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