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UK lawmakers pile pressure on insurers over pandemic claims

UK lawmakers pile pressure on insurers over pandemic claims

(Reuters) Britain's lawmakers have piled more pressure on insurers to show flexibility to businesses and customers making claims during the coronavirus epidemic that has shut down most of the economy.

The Treasury Select Committee (TSC) sent the Association of British Insurers (ABI) a detailed list of data it wanted in order to check that insurers are treating customers fairly.

The lawmakers said in their letter to the ABI that they wanted to know how many of its members have stopped offering insurance or changed the terms of existing products.

A key focus is on how much money has been paid out under business disruption insurance.

“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?” the letter said.

“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?”

Britain's finance minister Rishi Sunak said last week that government measures would be helpful to companies making claims on policies that cover for pandemics.

The Financial Conduct Authority has told insurers that the behavior of customers will change due to restrictions to avoid the spread of coronavirus, but their ability to make claims on motor, travel and home insurance should not be affected.

The lawmakers asked for details on the flexibility insurers can show businesses regarding cover for costs relating to coronavirus.

"I recognize the challenges in providing this data, but I would be grateful for a swift response, including in separate letters if certain data and information proves easier to attain than others," TSC Chair Mel Stride said in his letter.

The ABI had no immediate comment.

The trade body has said that insurers have already paid out a record £375 million ($448 million) to customers for canceled travel plans and accommodation costs due to disruption from coronavirus.

 More insurance and risk management news on the coronavirus crisis here.