BI TEST CASE MAY TRIGGER REINSURANCE DISPUTES: AM BEST

Last month’s Supreme Court ruling in the UK’s business interruption test case could trigger reinsurance disputes, according to AM Best. The Supreme Court judgement is expected to result in more than £1bn in losses for insurers as some 370,000 policyholders claim for Covid-19 related BI losses. Following the ruling, affected insurers are expected to increase their Covid-19-related BI loss estimates, AM Best said. “Possible disputes with reinsurers loom and it will be some time before insurers realise the exact cost of the pandemic on their commercial property books,” the ratings agency said. However, actions taken by insurers to define BI cover during 2020 should mean the majority of Covid-19-related exposures will have run-off soon after the anniversary of the initial lockdown in March, it added.