In­surer Royal Lon­don pays out £8.5m for Covid deaths

The Daily Telegraph - Business - - Business - By Michael O’Dwyer

IN­SURER Royal Lon­don has paid out £8.5m to the fam­i­lies of 1,200 Covid vic­tims who were cov­ered by its life in­sur­ance poli­cies.

The mu­tual has pen­cilled in a fur­ther £10m in claims re­lated to Covid-19 but warned there is still un­cer­tainty over how many peo­ple the pan­demic will ul­ti­mately kill.

Bosses also said that the wider health im­pacts are un­known from thou­sands of can­celled oper­a­tions and med­i­cal check-ups dur­ing lock­down.

There are fears that pa­tients with can­cer or other se­ri­ous health prob­lems will suf­fer from slower treat­ment than nor­mal as a re­sult of the pan­demic and may die ear­lier as a re­sult.

Royal Lon­don swung to a £181m pre­tax loss in the first half of 2020 as the pan­demic pum­melled the value of its in­vest­ments and hit re­turns on bonds, down from £393m profit a year ear­lier.

In­sur­ers have large re­serves to en­sure they can pay out on claims. This money is in­vested in fi­nan­cial as­sets such as shares and bonds and in real as­sets such as prop­erty to make a re­turn.

Royal Lon­don has £139bn of as­sets un­der man­age­ment and is the largest of the re­main­ing UK mu­tual in­sur­ers, owned by its 8 mil­lion pol­i­cy­hold­ers.

New life in­sur­ance and pen­sions sales fell from £5.8bn in the first half of 2019 to £4.7bn this year as cus­tomers de­layed ma­jor in­vest­ment de­ci­sions.

The slump came de­spite a 15pc in­crease in sales of in­sur­ance prod­ucts such as in­come pro­tec­tion, which pays out if work­ers fall ill and are un­able to do their job.

Royal Lon­don is ex­pected to com­plete the sale of its As­cen­tric plat­form, which has £14bn of as­sets un­der ad­min­is­tra­tion, to fund man­ager M&G by the end of 2020.

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