This includes payments on business interruption, travel insurance, weddings policies and cancelled school trips. The estimate is part of the ABI’s response to the Treasury Select Committee that sets out how insurers continue to support their customers at this time.

The figure is an estimate and can only provide as full a picture as possible at this stage. Of the £1.2-billion working estimate, £900 million relates to business interruption claims, £275 million paid to customers on travel insurance, and £25 million across wedding insurance, school trips and events. This is in addition to the estimated £363 million that will be paid to customers following Storms Ciara and Dennis earlier this year.

Huw Evans, ABI’s Director General, said: “This is an unprecedented event, and insurers recognise that it is a very worrying time for everyone. While many business owners are uninsured for pandemics, UK insurers still expect to pay over £1.2 billion in claims, making this a significant insured event.

“However, we are also painfully aware that the majority of businesses are uninsured for global pandemics, as is the case throughout continental Europe and North America. Although ABI members expect to pay £900 million in business interruption claims, most policyholders are not covered for pandemic losses.

“We agree strongly that the UK should examine public-private partnerships to find a lasting solution, to enable more affordable, more extensive pandemic insurance cover to be available to those firms who want it”