Strictly
embargoed until 00:01 on Saturday 25 April 2020
, Chair of the Treasury Committee, wrote to Huw Evans,
Director General of the Association of British Insurers (ABI), on
25 March to seek answers on how the insurance sector is
responding to coronavirus at a time when many will look to their
insurer for both flexibility and assurance.
Commenting on the response to the letter, which the ABI has
published, Mr Stride said:
“The ABI has estimated that its members will pay out £900
million in business interruption claims relating to coronavirus.
Yet the Committee continues to receive evidence concerning the
difficulties that firms are facing in making a successful
claim.
“For example, UKHospitality told us that 71 per cent of its
members have had claims rejected, with only one per cent having
any success.
“There may be many instances where individuals and
businesses believe they are covered, but in reality may not be.
However, we are concerned that the insurance sector goes the
extra mile in meeting claims wherever possible. For example,
where there may be grey areas within policies.
“The Committee echoes the expectations of the FCA: insurers
should be clear and not misleading whenever they communicate and
be fair and professional in how they deal with their
customers.
“In his letter, Huw Evans raised the issue of state
intervention in the future cover of pandemics. It’s an important
point that the Committee may choose to raise with the Chief
Secretary to the Treasury during our evidence session with him
next week.”
--Ends--
Notes to Editors
-
Mr Stride’s letter to Huw Evans, Director General of the
ABI is here.
The questions asked by Mr Stride were:
-
How many of your members (by type of
cover, e.g. commercial, travel) have ceased
to offer a product since the onset of the
crisis?
-
-
Where products have ceased to be offered, can you
provide the type and number of products that have been
taken out of the market?
-
How many of your members (by type of
cover) have changed the terms of a
product:
-
-
While it is in force (number of products and
type)
-
- At
renewal (number of products and type)
- At
initial purchase (number of products and type)
- Can you
provide examples, by product, of how policies have changed,
while in force, at renewal or at initial purchase?
- Can you
provide, on a weekly basis since 1 January 2020, the aggregated
number of policies sold by type of cover, separated by renewal
or initial custom?
- Can you
provide information on how firms have communicated to
customers, both current and potential, how things have changed
in the market, and where exclusions, or changes in when
policies can be called upon, have also changed?
- Can you
provide an estimate of the amount of money, in aggregate, your
firms expect to pay out for business disruption in the face of
the coronavirus?
- Can you
provide details of the approach that your members are taking in
respect of business interruption insurance, given the
government’s recent announcements concerning the effective
moment of the requirement for businesses to close?
- Can you
provide details of the approach that your members are taking
regarding the provision of cover for the costs to business
relating to Covid-19 and where there may be some flexibility
shown in respect of this element of potential cover?
- Given that
the NHS has secured an agreement to use private hospital
facilities and staff, what are the implications for the cover
that firms are able to provide to individuals with private
health insurance policies?
-
ABI sent an interim response to the Committee on 27
March here.
-
UKHospitality gave evidence to the Treasury Committee on
21 April. The transcript is here.
The figure that Mr Stride quoted is in Q248.
