Insurers open to repaying State the value of any Covid supports deducted from payouts

The country's largest insurance firms told the Oireachtas Finance Committee they would 'engage' with the Government over repaying the State any money they might deduct from pay-outs to customers on account of claimants having received Covid-related supports
Insurers open to repaying State the value of any Covid supports deducted from payouts

FBD has paid out more than €11m in interim Covid disruption insurance to publicans.

Some of the country’s largest insurance firms have said they will “engage” with the Government over repaying the State any money they might deduct from pay-outs to customers on account of claimants having received Covid-related supports.

Addressing the Joint Oireachtas Finance, Public Expenditure and Reform Committee, Zurich Ireland CEO Anthony Brennan said his company “will engage with the minister” on the subject of repaying relevant Covid supports to the State. 

Mr Brennan said he does not expect legal action to arise over the issue.

Last month, Public Expenditure Minister Michael McGrath said the Government was examining the question of insurers looking to deduct the value of Covid support payments to companies from their insurance payouts.

Mr McGrath said the various Covid supports on offer to struggling businesses were never intended to act as a subsidy for insurance companies or a buffer for their profits.

However, Zurich, FBD and Aviva told the committee that no meetings have yet been held with the minister.

New guidelines for personal injury awards

Mr Brennan said the insurance industry “will not be found wanting” over adhering to reform and lowering premiums following the introduction of new guidelines for personal injury awards.

Aviva Ireland CEO Declan O’Rourke said his company was “committed” to passing on savings generated from reduced awards and had already lowered premiums.

Mr O’Rourke also suggested Aviva is largely untouched by Covid-related business interruption insurance concerns. 

He said Aviva Ireland covers about 15,000 customers for business interruption, but the “vast majority” of these policies don’t provide cover for interruption arising from the pandemic.

"The wordings used by Aviva in these policies are unambiguously clear. We do have approximately 50 policies taken out by small businesses where the wording is not as clear. So far, we have received only a few claims on these policies, and we have paid these," he said. 

"We have a small cohort of corporate policies where a claim may arise in the future. We are working closely with the brokers on these cases," he said.

Mr O’Rourke said “a relatively small number” of customers have complained over being refused over a Covid insurance claim, but most were resolved. 

“A handful” of customers took cases to the Financial Services and Pensions Ombudsman, but all of these cases were ruled in Aviva’s favour, he said.

FBD chief executive Tomás O’Midheach reiterated that his company will pay “reasonable” legal costs to the pubs which won the recent Covid business interruption test case against the insurer. The full costs, to FBD, of that loss will be known later in the summer.

Mr O’Midheach told the committee that FBD has paid out more than €11m in interim Covid insurance payments to affected publicans as it awaits the final resolution from the courts.

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