Hiscox insurer collapsed to a pre-tax loss of $ 268.5 million and admitted it suffered “brand damage” due to court disputes with companies that filed claims after the pandemic forced them to close.
CEO Bronek Masojada said Hiscox regretted the “uncertainty and anxiety” caused by the dispute concluded with the Supreme Court to rule in January.
The company reported an annual loss as it set aside $ 475 million to cover COVID-19 payments, mostly related to the cancellation of events, and the rest covers business interruptions.
Hiscox was one of the firms involved in a case in which the Supreme Court forced insurers to pay disputed claims worth at least £ 1.2 billion.
Pubs, cafes, wedding organizers and beauty salons claimed to face failure when they were denied payment due to business interruption policies caused by the state’s first lock-in.
Commenting on the case in annual results, Hiscox said its title was designed to respond to “local events” rather than “steps taken across the country to manage a pandemic.”
He defended his decision, along with other insurers, to appeal the original high court ruling on the case – aimed at clarifying about 370,000 policies – and take it all the way to the Supreme Court.
CEO Bronek Masojada said about one-third of Hiscox’s 34,000 business closure policies in the UK “may respond as a result” of a ruling that it should pay off for companies forced to close.
Hiscox began paying claims as a result of the verdict, he added.
Mr Masojada said: “We clearly regret the uncertainty and torment caused by the dispute to our customers, so it is important that we learn from this experience.
“The most important lesson is the need for clarity of wording to ensure that intent is properly reflected in policy details.
“Hiscox has undoubtedly suffered some damage this year.”
Chairman Robert Childs said: “For the first time, our reputation for fast and hassle-free claims has come under intense scrutiny.
“We are sorry for any dispute with the customer, but especially where the policy formulation was not as clear as it should have been.”