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 daily newsletters. Signing up for any of our section newsletters will opt you in to the daily Coronavirus briefing.
Law360, London (May 7, 2020, 12:40 PM BST) -- British insurers paid out more than more than £5.7 billion ($7 billion) on 98.3% of claims in 2019, making it the highest percentage of claims on record, the Association of British Insurers said Thursday.
A new study by the association and Group Risk Development, another industry body representing the sector, showed that insurers paid out more than £5.7 billion in protection claims in 2019, representing a year-on-year increase of £470 million from 2018.
The claims were made on cover including critical illness, life insurance and income protection insurance.
The figures should give consumers confidence in the sector at a time when the coronavirus outbreak and associated losses are causing levels of financial anxiety to soar, ABI said. The outbreak has claimed more than 32,000 lives in Britain, which has passed Italy to record the highest death toll in Europe.
"The biggest-ever pay out in protection insurance shows how vital this cover is for people who need support at a difficult time," the association's assistant director and head of protection and health, Roshani Hill, said.
The high number of claims paid should "give people confidence they can trust that their insurance provider will be there when they need them," she added.
The study also found that insurers paid £60.5 million in individual income protection claims for mental health in 2019, an average claim of £15,728.
Life insurance payouts rose by £19 million, with the total 2019 figure reaching over £3 billion. Payouts were equivalent to £15.8 million a day, which is £1.3 million a day more than in 2018.
"During uncertain times, when insurers are doing what they can to support individuals, families and the NHS, being able to have this confidence is more important than ever," Hill said.
Insurers across Britain and Europe have been forced to act during the public health crisis. German insurance giant Allianz said last week it will hand back €9 million ($9.7 million) to its Irish car insurance customers to reflect the drop in traffic amid the COVID-19 lockdown.
Britain's Financial Conduct Authority urged insurers in March to treat customers fairly during the crisis.
And the Central Bank of Ireland also asked insurers to prioritize customers' needs as they assess claims for pandemic-related losses. Insurance Ireland agreed to be flexible and give policyholders the benefit of the doubt.
--Additional reporting by Najiyya Budaly. Editing by Ed Harris.
For a reprint of this article, please contact firstname.lastname@example.org.