14 News analysis Claims statistics 2010: transparency around critical illness is maintained...


Insurers paid out more than 90% of critical illness (CI) claims in 2010 but many continue to refuse to publish similar statistics for income protection (IP) claims, despite demands for greater transparency. The annual publication of CI claims paid statistics is now a firm fixture in


the protection industry calendar, with providers keen to reassure advisers and consumers that they are honouring the promise to pay valid claims. Since the introduction of guidance on non-disclosure from the Association of British Insurers (ABI) in 2008 the proportion of claims declined for this reason has fallen to an average of 2.4%. While the results are a useful sales aid for IFAs, providers remain wary of


drawing comparisons between the results for different books of business. Peter Webb, a spokesman for Friends Life, said comparing the results of Bupa and AXA (two protection businesses acquired to form Friends Life) to more mature books was “like trying to compare apples with oranges.” Although such concerns about the validity of comparison are no longer


used by providers to avoid publishing CI statistics, they are still cited by those unwilling to apply the same transparency to IP claims. The exception is the friendly societies, many of whom report pay-out rates of well over 90%, according to figures compiled byHealth Insurance. Martin Shaw, chief executive of the Association of Financial Mutuals,


said that the small size of friendly societies and shorter or non-existent deferred periods could facilitate publication of statistics. But he added: “One reason why our members are keen to publish claims


statistics is because they are focused on handling claims well. Within proprietary organisations there is a much more defensive approach to claims. They will pay out valid claims but there may be more of a focus on challenging claims.” By looking at general information in annual reports and publications


from the Financial Services Authority, he believes that proprietary insurers are paying “maybe 80-85%” of IP claims. Paul Hudson, chief executive of Cirencester Friendly, challenged


arguments about the difficulty of comparing deferred period products with those that pay out on day one. “This is not a valid argument because they [proprietary insurers] could


do a comparable calculation,” he said. “When I have talked to people who are reluctant to publish I get the impression that their figure is quite a bit


Project1:Layout 1 30/3/11 15:34 Page 1


lower and they are concerned that people will make snap judgements. But if you are transparent and produce all the data you can argue your case.” While some proprietary providers, including AEGON and Legal & General


have previously published IP claims, none have done so in 2010. Phil Brown, chief underwriter at Zurich, said the ABI planned to publish industry-wide data in the coming months, after a year of collecting individual company information in a consistent way.


PROVIDER AEGON Ageas Protect


CRITICAL ILLNESS CLAIMS PAID DATA PAID OUT 2009 88% n/a


2008 91%


Not publishing until more


claims received (estimated to be in 2013)


Aviva AXA


Bright Grey Bupa


Friends Provident (to be rebranded Friends Life)


Legal & General LV=


PruProtect


Scottish Provident Unum Zurich


90% 87%


83% 86.1% 87.3%


93% 87%


Not publishing yet


86.7%


91% 93%


93%


89% (January – September)


92.6%


93.6% 90%


Not publishing yet


91.3% 91% 93% (first half)


Not available yet


95% (first half) 82.2%


92.1%


91.8% 93.5%


Not publishing yet


90%


Not publishing Not publishing Not publishing 91%


91%


2010 91% n/a


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48