View more on these topics

Kathryn Knowles: Remove the smoke and mirrors from protection claim declines

A common theme in the protection industry is a calling for increased honesty and transparency over claims payouts. I want to flip that on its head a bit though, and say insurers need to be bolder when it comes to publishing their claims statistics – not about what went right, but about what went wrong.

We have all seen the news articles that put our industry to shame; where a technicality of an insurance contract has meant someone going without a payout. The stories make me wince. Those of us in the industry can probably understand why the claim was not paid, but that is not what the public is going to see. They just see the big, bad, money-hungry insurer that rips everyone off.

Insurers often publish statistics stating 98 per cent of claims have been paid. They detail the millions of pounds customers have received, providing fantastic case studies of when a claim has changed someone’s life for the better.

But there is always that niggling feeling: “What about the 2 per cent that were not paid out? Sod’s law says I’ll be one of them. The insurer will use a twist of wording in the contract to weasel out of a claim.”

Insurers need to step up and address this head-on. If claims are being turned down for genuine reasons, then there should be no cause for worry at all.

For example, reason one: non-disclosure. Insurers need to explain what this is. Give an example of a non-disclosure that resulted in a partial payment and give another where someone wilfully non-disclosed and the premiums were refunded instead. People will understand the reasons if they are given the information.

Or reason two: not meeting the definition of a claim. People are going to hold on to the fact that the big, bad insurer has not paid a claim out for cancer. But they are not going to hear that it wasn’t severe enough to meet the definition.

Explain that invasive lung cancer has far more of an impact on somebody’s life than a small skin melanoma.

And then there is reason number three: non-payment of premiums. This has to be the easiest one for an insurer to discuss.

If someone has not paid the premium for their policy, or the policy has lapsed, it’s not going to pay a claim. People will understand that.

I know we shouldn’t dwell on negatives, that we have far more positive stories to share.

But the problem is that negative news stories are what is remembered, and we cannot simply ignore them and hope people forget.

We need insurers to be brave and own the negative stories. We need to demonstrate that they look for reasons to pay claims, not for reasons to decline. We need to build trust that declined claims are fair and, if we cannot do that, then you really have to ask whether the insurer did the right thing.

Kathryn Knowles is managing director of Cura Financial Services



SJP terminates Woodford fund deal after Equity Income suspension

Advice giant St James’s Place has terminated a £3.5bn management agreement with Neil Woodford in the wake of the suspension of his flagship Equity Income Fund. The mandate has been handed to Columbia Threadneedle and RWC Partners in a joint exercise. The funds include the UK High Income Unit Trust, UK Equity (Life and Pension), […]


Alastair Irvine: Shaky ground for the euro as it turns 20

When a currency is trying to be all things to all people, it lives dangerously The euro has reached its 20th anniversary without much fanfare. Across those nations that call it their currency, there remains debate on whether it has boosted prosperity, or been a straitjacket hindering the growth of the bloc’s more fragile economies. […]

Quilter Cheviot poaches three more managers from Brooks Macdonald

Discretionary fund manager Quilter Cheviot has further boosted its headcount with a raft of new hires from rival investment manager Brooks Macdonald. The appointments follow four others last month including London-based former Brooks Macdonald staffer, Richard Wayne-Wynne. Former Brooks Macdonald investment manager Jennifer Innes will now join Quilter Cheviot’s Edinburgh office where she will focus […]

Sustainability Q&A

Following his latest webinar ‘Has sustainability been Trumped’ Mike Fox answers questions in relation to how Trump’s environmentally unfriendly policies might affect sustainable investment strategies. Read the article here The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm