Insurance company FBD has set aside €30m to cover uncertainty surrounding business interruption claims as a result of the COVID-19 pandemic.
The issue is the subject of legal proceedings, as FBD has argued that its business insurance policies do not cover events such as the pandemic.
Frustration
Its interim chief executive Paul D'Alton this morning acknowledged the “disappointment and frustration” of businesses concerned, particularly publicans.
“However, we are unable to provide cover for what we believe to be, and are advised is, an uninsured risk not covered by our policies.” he said.
A test case on the issue is now scheduled for hearing in the Commercial Court in October 2020. Mr D’Alton said this was “the quickest and most efficient way of achieving clarity for our customers”.
He warned, however, that the company faced a period of uncertainty until the business interruption dispute was settled.
Chief executive
The group also confirmed that Tomás O'Midheach would become chief executive on 1 February next year, having announced on Thursday that he was leaving AIB, where he had been chief operating officer.
In its results for the first half of the year, FBD reported a pre-tax loss of €9.3m. It said the last few months had seen “limited changes” in the insurance claims environment due to restrictions which affected the ability of courts to operate
FBD said the average cost of all capped injury claims and settlements marginally decreased over the last 12 months, but settlement activity was impacted by court closures and the inability to engage in pre-trial negotiations.
Awards
The insurer welcomed that establishment of The Personal Injuries Guidelines Committee last April. Its guidelines, due in October 2020, will replace the Book of Quantum, and FBD believes it will reduce personal injuries awards.
It also said the change in the court taxation system and adjudication of legal bills “appears to be increasing legal costs”, with more formal bills being presented by legal cost accountants rather than solicitor firms.