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The Association of British Insurers says that all life insurance claims related to coronavirus deaths had been accepted. /VCG
UK insurance companies have already paid out $118 million in life insurance claims from COVID-19 for three months to the end of May, while Swiss firm Zurich has reported a 40 percent fall in profits.
In a gloomy picture for firms, the Lloyd's of London insurance marketplace has already said it is expecting to pay out in the range of $3 billion to $4.3 billion to its global customers because of the far-reaching impact of the virus.
The Association of British Insurers (ABI) has revealed that life insurers received 7,000 claims from families of people who died from the coronavirus during the three months up to May and the $118 million paid out covers 83 percent of them. Every claim so far has been accepted, the ABI added in a statement.
"Every COVID-19 death is a tragedy. While no amount of money can ever replace a life, insurers have been doing all that they can to help families cope financially through these unprecedented and distressing times," said the ABI's Roshani Hill.
"We know the coronavirus has long-lasting impacts and protection insurers will continue to support families hit by this tragedy. No one knows what is round the corner, which is why protecting yourself and your family against the worst is vitally important."
The average payout is expected to be $83,000 for an individual policy and $179,000 for a group policy.
Life insurers have been hit by the pandemic but their losses are being seen as limited.
Although they are paying life insurance claims, worsening life expectancy and the age profile of many COVID-19 victims will mean pensions, often the bulk of their business, will have been paid for a shorter period than expected, industry sources have told Reuters.
The ABI has said it expected its members to pay $1.6 billion in pandemic-related claims this year, due to such events as "business interruption" and "event cancellation."
Industry sources say that figure could be far higher if the UK's Financial Conduct Authority wins a test case against insurers over the wording of business interruption policies. A decision is expected in mid-September.
Elsewhere, Swiss insurer Zurich is looking to bolster its balance sheet through rising commercial insurance rates after the company reported a 40 percent drop in profits.
Europe's fifth-largest insurer said it expected COVID-19-related insurance claims at its property and casualty business to be $750 million for the full year, the same level it indicated in May.
"It's been a relatively extraordinary six months," chief financial officer George Quinn said. "The challenge is not over."
Zurich's first-half business operating profit fell 40 percent to $1.7 billion, hit by payouts linked to the pandemic and weaker financial markets, but it was in line with analysts' forecasts of $1.69 billion.
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Source(s): Reuters
