The pandemic is the third largest catastrophe after Hurricane Katrina and the 9/11 attacks, says AGCS

Two new Covid-19 sub-variants – BA.4 and BA.5 – have emerged and are spreading in the UK, putting the insurance industry back on alert that restrictions could return.

According to BBC News, the variants were first identified in South Africa and are related to the Omicron variant.

The UK Health Security Agency (UKHSA) put out a warning in last month (June 2022) when the two new variants began spreading again after first being identified in the UK in May.

At the time, professor Susan Hopkins, chief medical advisor at UKHSA, said: “We have seen a rise in hospital admissions in line with community infections, but vaccinations are continuing to keep ICU (intensive care unit) admissions and deaths at low levels.”

On 20 July 2022, official statistics from JHU CSSE Covid-19 Data revealed that there were 134,203 new cases of Covid in the UK. 

Meanwhile, figures from the Office of National Statistics (ONS) revealed that a total of 2.7 million people in UK private households in the week ending 29 June 2022 were estimated to have Covid – up from 2.3m the previous week.

An ongoing issue

A report entitled Covid-19 Losses Settle, but Pandemic Effects Linger by Allianz Global Corporate and Speciality (AGCS) published in July 2022 noted that the insurance industry’s losses from the pandemic were estimated to be around $44bn (£36.8bn) to date.

This made the pandemic “the third largest catastrophe loss behind Hurricane Katrina and the 9/11 Attacks”, according to the report.

In some instances, Covid related claims have yet to be settled – including business interruption case Stonegate v Amlin.  AGCS said business interruption and event cancellation represented the bulk of Covid-related claims.

Philipp Cremer, global head of claims performance and liaison at AGCS, said: “Some £1bn of business interruption claims related to the pandemic have already been paid, but a number of important cases are being litigated in the UK and elsewhere, so this is still very much an ongoing issue.

“We might still see even new claims being brought forward possibly as late as next year.”

Insurance Times has contacted Marsh and KPMG for comment.