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FCA’s BI claims handling report an “important reminder” – CII

FCA’s BI claims handling report an “important reminder” – CII | Insurance Business UK

FCA’s BI claims handling report an “important reminder” – CII

The Chartered Insurance Institute (CII) has been quick to respond following the release of the Financial Conduct Authority’s (FCA) report on “lessons learned” from how the industry handled business interruption (BI) claims in the aftermath of the UK BI test case.

In its assessment, the FCA observed areas of good practice and areas for improvement. The positives include issuance of preliminary interim payments, use of different customer contact channels, and employment of technical external resource where needed.     

Meanwhile areas where companies did not meet the regulator’s expectations span from inadequate records of policy wordings, to a lack of relevant conduct-focused metrics when overseeing delegated partners, as well as the absence of clear and robust conduct-focused management information.

Commenting on the findings, CII policy and public affairs director Matthew Connell stated: “It is encouraging to hear that insurers did many things well in their response to business interruption claims, including dedicating resource to the issue at an early stage, developing proactive communications for customers, and making interim payments while only requiring basic information.

“The FCA report is right to focus on the speed in which claims were made in certain circumstances. Our latest research with SMEs on business interruption insurance, conducted in January and July this year as part of our Public Trust Index, shows that two key areas in which insurers can do most to improve consumer outcomes are: ‘repairs or replacement items are completed/delivered at a time to suit me’, and ‘my claim is settled quickly’.”

Connell noted that many insurers use technology to address the issues, while at the same time giving customer-facing staff the autonomy to make decisions for the benefit of customers.

“The FCA’s report is an important reminder that insurance is not a commoditised product, but is a complex service delivered by people with a wide range of skills from risk management to effective communications,” he declared.

“The CII released guidance around transparency and customer communication during the pandemic, and we will continue to build on this guidance and promote our Transparency Companion to our Code of Ethics to help raise standards in claims handling going forward.”

BI claims data published by the FCA on October 4 shows that the industry has already made final payments worth over £1.2 billion, while interim/initial payments for unsettled claims stand at £296.9 million.

In terms of claims numbers per insurance provider, here’s the breakdown:

Firm name

Number of BI claims for COVID-19 related loss that have been accepted

Number of BI claims where the insurer’s claim validity decision is pending

Number of BI claims where an initial or interim payment has been made

Number of BI claims where full payment has been made

Accredited Insurance (Europe) Ltd

34

13

7

20

Ageas Insurance Limited

48

18

0

48

Aioi Nissay Dowa Insurance UK Limited

12

0

0

2

Allianz Global Corporate & Specialty SE

7

0

0

7

Allianz Insurance Plc

2339

55

131

2139

Arch Insurance (UK) Ltd

1157

9

1

1059

Argenta Syndicate Management Limited

1145

2

3

1150

ArgoGlobal SE

257

0

14

164

Aspen Insurance UK Limited

6

6

2

1

Asta Managing Agency Ltd

25

0

0

22

Aviva Insurance Limited

2130

2

80

1682

AXA Insurance UK Plc

2662

32

301

2034

AXA XL Insurance Company UK Limited (formerly XL Catlin Insurance Company UK Limited)

514

9

5

469

AXA XL Underwriting Agencies Ltd (formerly Catlin Underwriting Agencies Ltd)

59

1

0

53

AXIS Managing Agency Limited

3457

40

25

3080

AXIS Specialty Europe SE

468

42

11

435

Beazley Furlonge Limited

75

0

0

73

Brit Syndicate Limited

34

0

0

32

Canopius Managing Agents Limited

1466

0

55

1037

China Taiping Insurance (UK) Company Limited

342

0

0

334

Chubb European Group SE

46

0

1

41

Covéa Insurance Plc

2783

32

19

2715

Coverys Managing Agency Ltd

480

16

4

531

Ecclesiastical Insurance Office Plc

34

0

5

23

ERGO Versicherung Aktiengesellschaft

309

36

9

293

Fairmead Insurance Limited

964

0

0

434

Faraday Underwriting Limited

56

0

0

50

Great Lakes Insurance SE

17

4

2

15

HCC International Insurance Company Plc

6

7

0

3

HDI Global SE

113

0

0

48

HDI Global Specialty SE

820

30

94

624

Hiscox Insurance Company Ltd

11010

120

445

7758

Hiscox Syndicates Ltd

88

9

1

88

Liberty Mutual Insurance Europe SE

61

0

0

58

Markel International Insurance Company Limited

894

12

19

861

Mitsui Sumitomo Insurance Company (Europe) Ltd

1

0

0

1

MS Amlin Insurance SE

465

0

15

370

MS Amlin Underwriting Limited

1511

0

30

1356

Navigators Underwriting Agency Limited

0

0

0

0

Probitas Managing Agency Limited

0

5

0

0

QBE Europe SA/NV (UK Branch)

54

0

0

5

QBE UK Limited

2354

0

61

1522

QIC Europe Limited

533

6

53

457

RiverStone Managing Agency Limited

808

0

30

890

Royal & Sun Alliance Insurance Ltd

1958

27

74

1799

SCOR Managing Agency Ltd

12

0

0

12

Swiss Re International SE - UK Branch

0

1

0

0

The New India Assurance Company Limited

802

84

21

625

Travelers Syndicate Management Limited

8

3

1

3

XL Insurance Company SE

54

0

0

41

Zurich Insurance Plc

108

44

41

42

 

The FCA expects March 2023 to be the regulator’s final BI claims data collection and publication.