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Law360, London (August 19, 2020, 12:47 PM BST ) Insurer QBE Europe has said it will refund £10.6 million ($14 million) in premiums to bus companies that have taken vehicles out of service during the pandemic in Britain.
The London-based company said on Tuesday that 60% of the rebates went to the bus and coach industry, which it said has been "hard hit by lockdown and social distancing measures." Motor fleet cover can also include taxi and rental car companies, although the company did not offer a further breakdown.
U.K. insurers with large motor insurance books have seen profits surge during the lockdown, when there were fewer cars on the road. Many of them have issued refunds on premiums to policyholders or temporarily reduced the level of cover on offer.
Jon Dye, head of motor underwriting at QBE, said premiums had been refunded within days. "In the current economic environment, many of our customers needed the rebate now instead of waiting for the next quarter, which can often be the case," he added.
Admiral, Britain's largest motor insurer, said in April that it will refund £110 million in premiums to customers. The company posted a £286.1 million pre-tax profit in the first half of the year. Direct Line, another major insurer, said it has seen a reduction of £117 million in motor insurance claims in the first half of the year. It said it has also issued rebates to customers, although it did not say how much.
Ratings agency Moody's said motor insurers in Europe dealt with 70% fewer claims in April, while insurance technology company By Miles estimated a £1 billion benefit to U.K. insurers as a result of fewer claims being made.
QBE is one of eight insurers awaiting a High Court judgment in a case brought by the Financial Conduct Authority over whether they are obliged to pay out on business interruption claims to companies forced to close during the lockdown.
QBE Europe did not disclose in its half-year results posted on Aug. 12, how much it had saved from fewer cars being on the road. International chief executive Richard Pryce said the company had received $116 million in claims across its insurance and reinsurance businesses, without including a "small benefit from reduced claims volumes in some classes during the lockdown period in Europe."
--Editing by Ed Harris.
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