Business

Hiscox predicts less than £100m BI claims after FCA ruling

Hiscox Ltd has revealed its estimates that any additional Covid-19 claims arising from business interruption to be less than £100m net of reinsurance.

The speciality insurance provider’s predictions include claims from all its divisions and is a reduction of £150m from the upper end of the Group’s previously published risk scenario.

Earlier this week (15 September), the High Court ruled in favour of the FCA that clauses in some business interruption policies were ‘‘misleading’’, which resulted in thousands of businesses wrongly denied pandemic-related payouts.

Parties affected by the judgment are allowed to appeal, with any ruling on any such application expected to be made in November.

The insurance firm said: ‘‘Hiscox recognises these are extremely difficult times for businesses and regrets any contract dispute with customers, which is why it is committed to seeking an expedited resolution through this Industry Test Case. 

‘‘In line with FCA Guidance, Hiscox will communicate an update on the Industry Test Case to relevant policyholders through the appropriate channels. The Group has delivered a resilient performance in the third quarter so far, as trading conditions continue to improve in every segment.’’

It added: ‘‘In July and August, the Group grew its gross written premiums by 19% compared to the same period last year. Over this period Hiscox Retail achieved growth in both revenues and customer numbers, with premiums up 7%, including 6% for Hiscox UK.

‘‘Hiscox London Market has continued to benefit from strong rate improvement in the majority of classes, growing 19% in the two-month period, and Hiscox Re & ILS experienced accelerated rate momentum and double-digit premium growth at the July renewals.’’

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