QBE Insurance Group said on Wednesday a London court had largely ruled in its favour in a case that examined the reading of policy wordings by eight insurers in relation to business interruptions caused by the COVID-19 pandemic.
The closely watched case brought about by Britain’s Financial Conduct Authority (FCA) sought to clarify whether 21 types of business interruption policy wordings should pay out for closures and disruption caused by the pandemic.
The FCA on Tuesday said judges had ruled that some of the world’s biggest insurers were wrong to reject tens of thousands of claims from small firms battered by the pandemic.
However, some of the insurers said the ruling meant they wouldn’t have to pay out, or would have to pay out much less than modelled in a worse-case scenario.
QBE, Australia’s biggest insurer by market capitalisation, said in a statement that the high court ruled in its favour on two out of three of its disease policy wordings examined and in favour of insurers generally with respect to denial of access.
However, the company said it was considering its options to appeal a ruling that was in favour of policyholders with respect to one of its disease policy wordings.
QBE reaffirmed that its catastrophe reinsurance programme would limit the net cost of the UK business interruption claims to $70 million, which it has already accounted for as part of COVID-19 provisions announced in its first-half results.
The company said given the possibility of appeals from all parties and further legal action, the gross cost to QBE could change, but the net cost would not vary.