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Hiscox agrees deal with policyholders over Covid losses
28th Jun 2021 13:45
(Sharecast News) - Lloyd's of London insurer Hiscox has reached an agreement with the Hiscox Action Group over business interruption losses caused by the Covid-19 pandemic, it was announced on Monday.
When lockdown measures were first introduced, numerous small businesses claimed for loss of earnings under their business interruption policies. But insurers refused to pay, arguing that such unprecedented restrictions were not covered by the policies.
In response, the Financial Conduct Authority launched a test cast to assess policy wording. Hiscox participated in the case along with seven other insurers and HAG, a group of nearly 400 Hiscox policyholders denied payouts.
In January this year, the Supreme Court found largely in favour of companies receiving payouts, although it did not detail the size of the payments the insurers needed to make.
However, HAG also brought private arbitration against Hiscox, to determine matters that were not resolved in the test case, and on Monday it was confirmed that an agreement had been reached.
The insurer said: "The settlement is in line with the Supreme Court judgement, and the proceedings have now been resolved to the mutual satisfaction of all parties.
"The parties have agreed that the terms of the settlement are confidential."
In March, Hiscox said it has reserved $475m overall for pandemic-related claims.
Shares in Hiscox, which is headquartered in Bermuda and listed in London, were ahead 2% at 865.6p by 1330 BST on Monday.
When lockdown measures were first introduced, numerous small businesses claimed for loss of earnings under their business interruption policies. But insurers refused to pay, arguing that such unprecedented restrictions were not covered by the policies.
In response, the Financial Conduct Authority launched a test cast to assess policy wording. Hiscox participated in the case along with seven other insurers and HAG, a group of nearly 400 Hiscox policyholders denied payouts.
In January this year, the Supreme Court found largely in favour of companies receiving payouts, although it did not detail the size of the payments the insurers needed to make.
However, HAG also brought private arbitration against Hiscox, to determine matters that were not resolved in the test case, and on Monday it was confirmed that an agreement had been reached.
The insurer said: "The settlement is in line with the Supreme Court judgement, and the proceedings have now been resolved to the mutual satisfaction of all parties.
"The parties have agreed that the terms of the settlement are confidential."
In March, Hiscox said it has reserved $475m overall for pandemic-related claims.
Shares in Hiscox, which is headquartered in Bermuda and listed in London, were ahead 2% at 865.6p by 1330 BST on Monday.