The FTSE 250-listed insurer believes its business interruption exposure to Covid-19 is limited in Europe and that it has negligible exposure in its US retail business. It also said that its UK retail business has substantial reinsurance cover in place.
The company's UK unit provides business interruption cover to small and medium sized businesses as part of its small commercial package policies.
The Hamilton, Bermuda-based company estimates that around 10,000 UK businesses who have purchased business interruption cover have been directly impacted by mandated government closure to stop the spread of Covid-19.
Hiscox has been one of the companies in the firing line over payment of business interruption claims arising from the UK government lockdowns due to the virus. A Hiscox Action Group has been set up by a group of brokers and loss adjusters to look at whether or not they have a case to take legal action against the company.
Over the weekend, The Times newspaper reported that a group led by pubic relations firm Media Zoo is alleging that Hiscox is trying to avoid paying out for what they believe are legitimate claims. The firms have written a letter to UK Business Secretary Alok Sharma, which said Hiscox "refused to pay for legitimate business interruption claims", according to The Times.
The UK Financial Conduct Authority separately on Wednesday said that it has written to insurance firms, telling them how it expects them to handle claims by small and medium enterprises against business interruption cover during the Covid-19 pandemic.
In a letter to insurance bosses, the FCA's Interim Chief Executive Chris Woolard warned the watchdog would be carefully scrutinising the industry's treatment of customers.
In its defence, Hiscox on Wednesday said that it is reviewing every case individually and paying claims made by entertainment and travel businesses. The company estimates a net loss of USD175 million for losses emanating primarily from event cancellation, entertainment and travel in a global pandemic scenario.