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CI paid claims hit record high

The number of paid CI claims has reached a record high, research from Moneyfacts reveals.

The research, produced by Lifesearch, shows that in 2009, 90.5 per cent of CI claims were paid on average, compared to 88.4 per cent the previous year.

Last year, an average of 1.9 per cent of claims were declined due to non-disclosure and 7.6 per cent were declined due to definition not met. This compares to 2.5 per cent and 9.1 per cent in 2008.

L&G paid the most claims at 93.6 per cent, followed by Axa and Bright Grey, who both paid 93 per cent. Friends Provident paid 92.6 per cent, Scottish Provident paid 91.3 per cent and Skandia and Zurich both paid 91 per cent. Of Skandia’s declined claims none were due to non-disclosure.

Royal Liver paid out the least number of claims at 86 per cent, followed by Aegon on 88 per cent.

Nine of the 12 providers listed either improved on or maintained the level of payouts they achieved in 2008.

Moneyfacts editor of investment life and pensions Richard Eagling says: “With non-disclosure having long been a contentious issue within the critical illness industry, it appears the efforts of providers and the Association of British Insurers to tackle the problem are finally being rewarded. The improvement in the claims statistics can only serve to improve confidence in the critical illness proposition.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Aidan Dewhurst (Marketing Manager - Progress from 21st April 2010 at 11:45 am

    While it’s great to see that as an industry we have never paid so many CI claims, there’s a genuine danger in taking the league table approach towards Provider statistics.

    Last year Progress from Royal Liver was correctly quoted as paying 86% of CI claims, but as a relatively new company (five years old) with very few claims, the percentage figure doesn’t tell the whole story. One or two additional claims paid – or indeed rejected – can alter the percentage significantly and make us the best (or worst) provider in the market overnight.

    For example so far in 2010 at Progress we have paid 100% of CI claims, but rather than get carried away with malleable statistics, we want to be realistic – after all it will only take a handful of rejected claims to turn this figure on its head. It’s important to realise that Providers who are smaller in terms of business volumes, or newer to the industry (and so have fewer claims volumes) should not be represented in the same way as some of the larger more established players in the market, because the percentages don’t mean the same thing.

    At Progress we’re proud of our robust claims process and are confident that any claims we reject are done so for the right reasons. We’ve had a great deal of success in reducing non-disclosure on CI claims over the last five years and will continue to champion the cause of our wet-signature process, which we think makes a positive difference.

  2. Aidan Dewhurst (Marketing Manager - Progress from 21st April 2010 at 1:23 pm

    While it’s great to see that as an industry we have never paid so many CI claims, there’s a genuine danger in taking the league table approach towards Provider statistics.

    Last year Progress from Royal Liver was correctly quoted as paying 86% of CI claims, but as a relatively new company (five years old) with very few claims, the percentage figure doesn’t tell the whole story. One or two additional claims paid – or indeed rejected – can alter the percentage significantly and make us the best (or worst) provider in the market overnight.

    For example so far in 2010 at Progress we have paid 100% of CI claims, but rather than get carried away with malleable statistics, we want to be realistic – after all it will only take a handful of rejected claims to turn this figure on its head. It’s important to realise that Providers who are smaller in terms of business volumes, or newer to the industry (and so have fewer claims volumes) should not be represented in the same way as some of the larger more established players in the market, because the percentages don’t mean the same thing.

    At Progress we’re proud of our robust claims process and are confident that any claims we reject are done so for the right reasons. We’ve had a great deal of success in reducing non-disclosure on CI claims over the last five years and will continue to champion the cause of our wet-signature process, which we think makes a positive difference.

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