Insurer FBD said it estimates that gross claims and expenses arising from a Covid-19 business interruption publication test case, decided earlier this month, will reach € 150 million.
The amount includes claims that will ultimately be accepted by the reinsurers that shared the risk with FBD.
Meanwhile, the Dublin-listed insurer has increased provisions for its net exposure to € 30 million pub claims that had been booked last summer to € 65 million. The charge includes € 11 million of payments expected to reinsurers to restore protection.
“We will not appeal this judgment and we will work with our clients to ensure that compensation is paid as expeditiously as possible,” said the FBD when reporting the results for the entire year. “Gross claims costs (including legal and other expenses) are currently estimated at approximately € 150 million. Engagement with our reinsurers continues to finalize the position on reinsurance recoveries. “
FBD will not appeal the decision on Covid-19’s business …
FBD recorded a surprising pre-tax profit of € 4.8 million in 2020, aided by the release of € 23 million of reserves that had been made for claims made in previous years and a return of € 10 million from its investment portfolio. The group had a profit of € 112.5 million in 2019.
Its main general insurance business was marginally in deficit, with its combined operating ratio – an index that compares claims, costs and premium expenses – of 101.4 percent, as a result of business interruption costs. A value below 100 percent indicates that an insurer is launching business at a profit.
The Commercial Court ruled earlier this month in favor of four pub companies that challenged the insurer’s refusal to pay its pub policy as a result of closings stemming from the Covid-19 pandemic.
The FBD has already started making interim payments to the pubs, with more than 1,000 pubs affected by the Supreme Court decision.