Insurers pay €217m on Covid business interruption as FBD ruling awaited

FBD may receive ruling that could impact outstanding claims this month

Insurers operating in the Irish market had paid out €217 million on business interruption claims stemming from the pandemic by the end of last year, though a key upcoming ruling on FBD will largely determine the final cost to the sector.

“At end 2022, more than €217 million had been paid to 5,625 policyholders through settled claims and interim payments. This figure includes 4,809 claims which have been fully settled, and 816 who have received interim payments,” a spokesman for the Central Bank said in response to questions.

“While the vast majority of claims are now closed, we will continue to monitor the outcome of any remaining test cases in the courts – including the FBD quantum judgment – and will act swiftly should any of these judgments have a wider beneficial impact for similar groups of customers.”

The spokesman added that the Central Bank is unable to speculate on what the final cost of business interruption claims will be.


FBD lost out in early 2021 as the High Court ruled in favour of four publicans who challenged its previous refusal to pay out on its pubs policy. It had paid out €35 million as of the end of last year, mainly by way of interim payments, to hundreds of publicans affected by the decision. All told, the test cases have implications for more than 1,000 pubs and restaurants.

While two of the pubs had settled all outstanding matters with FBD last November, the company said in its latest annual report, published last month, that it hopes to “receive a reasoned ruling shortly” that would “assist us in reaching an agreement with the remaining two publicans and enable us to finally settle all outstanding claims”.

The two cases – involving companies behind the Leopardstown Inn in Dublin 18 and Sinnott’s Bar in central Dublin – are listed for a potential judgment from Mr Justice Denis McDonald on April 26th.

FBD had put out an estimate in mid-2021 that its gross business interruption payouts could reach €183 million, mainly borne by 17 reinsurers. While the company cut its net cost forecast early last year to €44 million from €67 million, it has refused since then to provide an updated gross figure.

Meanwhile, RSA Insurance Ireland, one of the other main insurers hit by business interruption claims stemming from the pandemic, said in its latest so-called solvency and financial conditions report (SFCR) for 2022 that its total costs from the issue are expected to amount to €75 million.

However, allowing for reinsurance recoveries, this falls to €15 million. It is understood that RSA Ireland’s business interruption cases stem from a small number of high-value claimants.

While the total figure is unchanged from estimates in the company’s 2021 SFCR, the net hit has increased from €9 million, previously.

RSA Ireland hands over about three-quarters of its annual premiums to its immediate UK parent, Royal & Sun Alliance Insurance Ltd, which is part of the wider RSA Group, as part of a reinsurance deal.

Last year, RSA Ireland ceded 76.4 per cent of its €399.1 million of premiums to its parent. The Irish subsidiary made an insurance underwriting loss of €6.33 million in 2022, compared with a profit of €1.98 million for the previous year, according to the report.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times