Insurers need to pay out on more claims related to the coronavirus pandemic, according to the head of the UK parliamentary committee that oversees the financial industry.
“We are concerned that the insurance sector goes the extra mile in meeting claims wherever possible, for example where there may be gray areas within policies,” Mel Stride, chairman of the Treasury Committee, said in a statement on Saturday.
Stride’s comments echo the stance taken by the main UK markets regulator, which sent insurance companies’ shares tumbling last week after it told them to pay valid claims quickly. The issue came to the fore after insurer Hiscox Ltd. rejected claims filed by policyholders who had coverage for business interruptions caused by contagious disease. Those policyholders appealed to the regulator, which is reviewing their case.
UKHospitality, an industry group for businesses such as restaurants, bars and hotels that have been hard hit by the government’s virus lockdown, told the Treasury Committee that 71% of its members had claims rejected, according to the statement.
Separately, UBS Group AG has estimated total insured losses of $30 billion to $60 billion as a result of the pandemic. That would be the biggest on record for a single event, and while the Swiss bank said it remained confident European insurers’ balance sheets could withstand the hit, the level of uncertainty remained high.