Last word THE VITAL PROMISE Why transparency about claims statistics is crucial


In a way it depresses me that there is still an ongoing debate about claims disclosure. The debate has been raging for some years and was started because advisers felt that the publication of claims paid percentages would give them,and much more importantly their customers, faith in critical illness (CI) products which were starting to be criticised for not paying out (particularly where total permanent disability was concerned). I remember debating against the Association of British


PETER LE BEAU MBE


Insurers (ABI) at an industry conference several years ago in favour of disclosure although the ABI took a benign and very constructive position in the debate. I think claims disclosure is one of the biggest “no-brainers” on the planet. Most companies have very good claims paid statistics for CI and have no reason to fear disclosure and if you have then I think advisers and


potential buyers of the product have every right to wonder why claims percentages are lower than might be expected. That is not to say that I think league tables tell the absolute truth (certainly the Premiership table has been lying these last few years!). We can get obsessed with league tables. If a company is languishing at the bottom with a claims paid percentage many points below the


rest of the market I can fully understand why advisers might fight shy of recommending them. But it is illusory to assume that a company is a better bet because it pays 96% of its claims to one that pays 95%. Anyway the good news is that at least in the CI market disclosure is the norm. It’s a slower process in the income protection (IP) market. A lot of companies are happily


revealing their claims paid percentages but this is by no means universal. The early meetings of the Income Protection Task Force – of which I am co-chairman – were marked by interminable discussions about what exactly constituted a claim as some providers felt they might be disadvantaged if their figures came under public scrutiny. I realise that some companies operate in different markets and a bancassurer for example may have a lower claims paid figure than a company selling IP solely among the professional classes. But surely the point is that the public deserve to know these figures. Would you buy a car if you didn’t know how fast it could go or what its fuel consumption was? Neither should anybody be expected to buy an IP policy from a company that won’t reveal their claims paid percentage. We have made it clear at the IP Task Force that membership will be conditional from next year


on revealing this figure on a basis to be agreed that is accepted as fair and realistic. After all when someone takes out an insurance policy the insurer makes a promise to pay them


if they encounter hardship of some sort (death is a pretty extreme form of hardship it must be said!).This is not a promise to be set aside lightly and the industry needs to remember this and act accordingly. After all, what could companies have to hide?


HI


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BAROMETER


What are the HIs and L0s of the health insurance and protection industry this month?


Protection innovation Creative new range from PruProtect


Employee protection Thoughtful new proposals to extend safety net


Long-term care advice Award-winning advice in a complex market


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(PAGE 32)


Doctor / insurer relations How best to balance choice and cost?


Critical illness Big shake-up in the provider landscape


Claims transparency When will IP providers publish?


ECJ ruling Differentiation branded discrimination


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(PAGE 14 AND 47)


(PAGE 20)


Policyholder care Dangers of provider M&A (PAGE 22)


International PMI in US Minefield for brokers


(PAGE 35) WANT TO KNOW MORE ABOUT THE RECENT EU RULING BANNING THE USE OF GENDER IN INSURANCE PRICING? TURN TO PAGE 20 NOW


April 2011 www.hi-mag.com


HealthInsurance


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