LONDON (Reuters) - British insurers are likely to pay more than 1.2 billion pounds ($1.5 billion) on claims from businesses and individuals affected by the coronavirus pandemic, an insurance trade body said on Saturday.
The estimate includes 900 million pounds for business interruption claims, a record 275 million pounds for cancelled travel and 25 million pounds for cancelled weddings, school trips and events, the Association of British Insurers (ABI) said in response to a request for information from parliament’s Treasury Committee.
Checking that insurers were treating customers fairly, the committee of lawmakers last month asked how many of the ABI’s members had stopped offering insurance or changed the terms of existing products.
The ABI said that only 4% of products had been withdrawn in March 2020 and insurers were being flexible over premium payments.
However, the trade body also said that many businesses would be unable to claim on their policies.
“Most policyholders are not covered for pandemic losses,” said ABI Director General Huw Evans.
“The UK should examine public-private partnerships to find a lasting solution to enable more affordable, more extensive pandemic insurance cover to be available to those who want it.”
The insurance industry has come under fire for rejecting business insurance claims during the crisis, with several groups of claimants threatening legal action.
Where there were grey areas in policies, insurers should go “the extra mile in meeting claims wherever possible”, Mel Stride, Chair of the Treasury Committee, said in response to the ABI.
The ABI’s estimate did not include payouts by insurers in the Lloyd’s of London or wider London commercial insurance market, it said.
(This story has been refiled to remove extraneous word from headline)
Reporting by Carolyn Cohn; Editing by David Goodman