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Irish insurer FBD puts €22m aside to cover lockdown claims

Written by Robert McHugh, on 25th Jun 2020. Posted in Financial

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Irish insurer FBD has set aside 22 million euros as a precautionary reserve against lockdown-linked claims by commercial customers, despite predicting it would win a test case due to be heard in October.

FBD had received more than 700 business interruption insurance claims by May after Ireland shut down its economy in late March to slow the spread of the coronavirus.

The claims were particularly from publicans, three of whom took the matter to the Irish courts.

Ireland's only domestically listed insurer said on Wednesday that it remains strongly of the view that its business insurance policies do not provide cover for a pandemic of this nature and that the 22 million euros would cover costs it may incur.

The court case will be closely watched by Irish restaurants who will reopen their doors next week under the government's cautious exit plan with pubs only set to fully resume trading three weeks after that.

Irish Central Bank Governor, Gabriel Makhlouf, said last week that 90,000 policies were under consideration for possible business interruption payouts, citing industry data.

He added that even if a policy is going to pay out, it was not immediately clear what or how much it would pay out for.

Neighbouring Britain's Financial Conduct Authority (FCA) aims to get business interruption insurance policies examined by a court as soon next month.

In France, a restaurant owner who won a court battle with Axa over business interruption cover reached a further settlement with the insurer last month, potentially setting the tone for payouts for similar insurance problems. (Reuters)

Source: www.businessworld.ie

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