Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Insurance UK newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360, London (August 21, 2020, 1:55 PM BST ) Ecclesiastical has set aside £14 million ($18.3 million) to pay out on insurance claims linked to COVID-19 where there is confirmed cover, the insurer said in its half-year results.
The company, which provides insurance for churches and listed buildings, said on Friday that the claims had pushed it into a £1.3 million underwriting loss for the first six months of 2020, down from a profit of £9.5 million in the same period last year.
But Ecclesiastical said it has not made provision for claims that could result from the Financial Conduct Authority test case at the High Court on claims for business interruption. The result of the City regulator's move is expected next month.
Ecclesiastical is one of eight insurers involved in the trial. The case will help to determine whether 370,000 small businesses will receive payouts from their insurers for the period in which the U.K. was in lockdown.
"Claims reserves are not held in respect of insurance cover that excludes pandemics," the insurer said in its results. "Ecclesiastical is well-capitalized and continues to expect to hold a capital position in excess of regulatory requirements, regardless of the outcome of the test case."
It said the result of the trial was "subject to appeal." The FCA has said that proceedings could "leapfrog" over the Court of Appeal directly to the Supreme Court if the ruling in the case is challenged.
Ecclesiastical, based in Gloucester in southwest England, made an overall loss of £59.7 million for the first half of the year, down from a profit of £42.8 million in the first six months of 2019. That was a consequence of the impact of the pandemic on financial markets, the company said, which triggered an investment loss of £48.9 million.
Mark Hews, group chief executive of Ecclesiastical, said the results were "disappointing" but that the company had already made most of its money back on the investments.
"These are investments that are being held for the long term and on which we have already seen some recovery," Hews said. "We expect this to continue over the months and years ahead, and we continue to take a long-term view and look beyond the current pandemic."
--Editing by Ed Harris.
For a reprint of this article, please contact reprints@law360.com.
