News Review: General Insurance
Lies, damned lies, and claims stats by Kevin Carr,
chief executive of Protection Review
and MD of Kevin Carr Consulting
Back in 2005 LifeSearch launched a campaign to get all protection insurers, and especially providers of critical illness cover, to publish their paid and declined claim sta- tistics. Te campaign received support at the time from the media and consumer groups, although not everyone was quite as supportive. I remem- ber the Association of Brit- ish Insurers telling a national newspaper that this wasn’t in the public’s best interests. Oh how times change. In the years since we’ve
seen quite a change in the at- titude of insurers to the extent that most firms now regularly publish their stats. It was nev- er about comparing one of- fice to the next, it was about rebuilding overall trust in the product, which it rightly de- served. At the time declined CI claims were everywhere – national press, television and consumer as well as adviser trust was arguably at an all time low. Te point of publishing
the numbers is to prove how valuable the cover is and also to help explain to customers what is and what isn’t covered. Tere are few better ways to convince a client of the prod- uct’s worth than to show spe- cific details of paid claims, which typically exceed 90% across the board, and likewise few simpler ways of explain- ing what isn’t covered, than by showing them claims which may have been declined.
However, some quarters
have recently challenged the need to continue publishing such statistics. Some have said it is patronising to consum- ers, while others say the job is done and as such we no longer need to continue. Personally, I say both argu- ments are categorically wrong.
Transparency If you think about your own insurance, any insurance for that matter, would you want to know how many claims were paid and how many were being declined? I know I would. Would I feel patron- ised? Certainly not. In fact one might argue that it could be elitist and unfair not
to
publish meaningful figures. Likewise to suggest that
the job is done makes some significant assumptions. Tis assumes that all of the public now have complete trust CI and the protection industry because they are obviously all happily aware of the statistics, which of course they are not. Tey probably never will be, but we must keep trying. In addition, the continued
publication of claims figures has no doubt encouraged pro- viders to improve their num- bers, and without their pub- lication the industry would never know if the numbers were falling. Back when the figures were first published most companies were around the 80-85% paid mark, where as now they are mostly in the 90-95% region. We’ll never reach 100% as
an industry. It’s a nice aim but it probably won’t ever happen. Te existence of TPD (total and permanent disability) will always see the odd declined claim for stress or a broken leg (which clearly aren’t per- manent) while they may al- ways be the odd person who is a bit too economical with the truth. What perhaps we do need is
a new, better and more inno- vative way of communicating the information to the public as well as advisers. Last year a reinsurer launched a set of Top Trump cards based on critical illness conditions, which may have been a step too far, but it certainly got advisers talking about claim stats.
G-Day changes gathering pace
LV= and Legal & General have responded to the opening shot from Ageas by announcing their adviser plans for G-day on December 21st. LV= said it will be offering advisers a ‘G-Day guarantee’ ahead of the deadline whereby any application received before 1 December with medical evidence outstanding will still be placed on gender specific rates, while Ageas Protect made a similar promise in July.
L&G has said it will support any applications with gender specific premiums that require a start date after 20 December,
22 MORTGAGE INTRODUCER OCTOBER 2012
providing they meet certain conditions. The firm is also launching a ‘gender response team’ who will be contacting advisers and their clients in the run up to the directive deadline to help gather evidence to complete applications as quickly as possible. These announcements are to be welcomed and we expect more from other insurers soon. Preferably the sooner the better so advisers can plan ahead and meet client expectation. Oh, but the regulators say its fine, I hear you say. Yes they do. But they also said PPI was fine.
www.mortgageintroducer.com
News in brief
• The ABI has published consumer guidance on the ECJ gender rule •
Confused.com has launched a “beat the clock” campaign for females to buy life cover before the premiums go up in December • Ageas has agreed to buy Groupama Insurance Company Limited (GICL) for £116m • LV= will switch its protection business to gender neutral rates on 1 December
• Unum has launched a website to help advisers communicate the benefits of income protection to clients • PruProtect has enhanced its income protection cover for NHS doctors
• Zurich paid out 91% of critical illness claims for 2011
• Swiss Re report says life cover is ‘too expensive’ for consumers • AIFA to rebrand as Association of Professional Financial Advisers • LV= has signed a protection advice deal with RAC
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