Insurer Protection Claims Statistics – Consumers Need the Full Story

Drewberry Insurance welcomes the fact that protection claims statistics for 2014 are now available for scrutiny.

We are pleased to see that a high percentage of protection claims are paid and this supports our experience. It is great to see that typically over 90% of claims are paid but more information is needed on claims that have been declined. Namely, when it comes to these insurers, why are one out of 10 customers having their claim turned down?

Drewberry Director Tom Conner comments: “Clearly, there are questions that need answering, such as, did the customers who had claims rejected receive the advice of an expert adviser or was it through their bank or direct? Did they understand what is meant by disclosure? If they had failed to make some facts clear, could more have been done to prevent genuine customers making such errors?

“As independent protection insurance advisers acting on behalf of our clients, we believe there is still more work to be done – and this includes greater standardisation of claims reporting so that better conclusions can be drawn.”

More information needed on rejected claims

Drewberry is calling for more information on why claims are declined – and we also believe that if a claim is valid that payouts should be made quickly with the customer – or their dependents – kept fully informed about progress.

As Mr. Conner says: “We know that in some cases, representations made to the insurer by an adviser or as a result of media coverage can result in a declined claim being paid. While insurers can make mistakes, it does our industry no favours if a claim is first declined and then paid. We want to see less scare stories in the media and more genuine case studies where the claim is paid without quibble.

“As our recent Protection Insurance Survey revealed, consumers only think that around 50% of claims are actually paid, so we need to do as much as we can to put that right, and that starts with transparency. If we can help to explain why some claims are declined that would go a long way in bridging the transparency gap.”

Drewberry’s Insurer Claims Statistics Tool

Our mission is to ensure customers only buy insurance that will pay out should the need arise. We also want to empower our customers so that they understand what they are buying and the reasons for choosing a particular insurer.

This is why we ask detailed questions about medical history, including GP visits, family health issues and the need to disclose accurately before any insurance application is made. We are also here to help with claims should a customer need help with the process.

Furthermore, to reassure clients that the vast majority of claims are paid have built a payout rate tool on our website listing insurers’ claims statistics for life insurance, critical illness cover and income protection insurance. These are shown for 11 leading insurers in the market and we will add more should they produce claims statistics.

Income Protection vs PPI confusion needs to end

There continues to be confusion about Payment Protection Insurance – also known as Accident, Sickness and Unemployment Insurance. Some mistakenly believe they have adequate insurance to protect their income, when they have only bought a policy that pays out for 12 months and contains added stipulations for making claims for conditions such as back pain and stress – major causes of absence from work.

It does the income protection industry no favours having an inferior and tainted product so often confused with it. Not only that but it is not fair on customers who often do not have the technical knowledge to properly differentiate the two. The Financial Conduct Authority (FCA) needs to make it clear that PPI style policies cannot be marketed as ‘income protection’, which is widespread right now.

Product suitability means claims will be paid

We see our role as to boost knowledge about the benefits of Protection Insurance and to ensure that that customers can make an informed choice about what offers them the best long-term coverage and covers the widest range of conditions.

Drewberry provides advice on the full range of protection insurance and looks at individual client situations and product suitability. We are passionate about reducing the protection insurance gap. We also want to raise understanding about the types of protection insurance and help customers decide what is right for their individual circumstances. Providing there is clarity and full disclosure this ensures that all valid claims will be met.