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Friendlies pay out 95% of claims as protection booms

Friendly societies paid out an average of 95 per cent of income protection claims last year, according to the Association of Friendly Societies.

The six providers that contributed to the data are the British Friendly Society, Cirencester Friendly Society, the Childrens’ Mutual, Dentist & General Mutual Benefits Society, Pharmaceutical & General Friendly Society and Pioneer Protection, the tie-up between Pioneer and Exeter Friendly Society.

Friendly societies saw income protection sales increase by 38 per cent last year compared with 2006. This bucks the general trend, as the latest Swiss Re Term & Health Watch shows a 14 per cent fall in income protection sales by insurers.

General secretary Martin Shaw says: “This is a first for the income protection industry, and we believe this information is vital for consumers and advisers in helping them to make an informed choice when buying income protection cover.

“The results reflect both the transparency of friendly societies as well as their commitment to supporting their members at a time of need. But as well as working actively to pay every claim that we can, we are not complacent about members whose claims are not paid.”

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