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 (March 19, 2021, 1:13 PM GMT ) British insurers have paid out £202 million ($281 million) in life insurance payments to families of those who died from COVID-19, the U.K. sector's trade body has said.
The Association for British Insurers said that the total of £202 million for grieving families equates to £553,000 per day since the pandemic began. The payouts included one of £250,000 that was made the day after notification of death, and separately a £1 million in payment to dependents of another family.
"No one will have been affected by the pandemic more than the families of those who have tragically died due to COVID," Yvonne Braun, the ABI's director of long-term savings and protection, said on Thursday. "While no amount of money can ever replace a life, insurers have and continue to do everything they possibly can to help families cope financially through these distressing and worrying times."
The ABI added that it expects to pay up to about £2.5 billion for COVID-19 claims incurred in 2020, including business interruption and travel insurance.
The body also said this is the first time it has ever collected life insurance payouts arising from a single event, reflecting the "unprecedented pandemic."
The research showed that insurers received a total of 11,198 claims in 2020 under individual and group life insurance policies. The vast majority — 10,205 — were individual and 993 were group schemes.
Approximately 96% of individual claims and 99% of group claims have already been paid, the ABI said. Of the total £202 million paid, £128 million relates to individual policies, with £73 million paid under group schemes.
Another £2.4 million has so far been paid from 968 claims made under individual and group income protection insurance. These policies aim to assist those who suffer a loss of income due to COVID-19 illness.
But insurers' response to the COVID-19 pandemic has also come under close scrutiny. The Financial Conduct Authority took insurers to court in December 2020 over their refusal to pay out business interruption claims connected to the first national lockdown.
The Supreme Court ruled in January that insurers should make payouts to hundreds of thousands of companies forced to close during that lockdown. The landmark decision came after more than more than six months of litigation.
The ABI estimated at the time that its members will pay out £2 billion in such claims following the Supreme Court ruling.
Across the Irish Sea, the Central Bank of Ireland said on Feb. 17 that it will continue to examine how insurers deal with business interruption payouts linked to COVID-19 following an Irish court's decision to back four pub owners in a battle against their insurers.
--Additional reporting by Irene Madongo. Editing by Joe Millis.
For a reprint of this article, please contact reprints@law360.com.
