Closed-life offices appear to have a poorer critical-illness claims paid record than insurers that are open to new business, according to research from Highclere Financial Services.
Figures from the ABI reveal 89.9 per cent of all CI claims were paid during 2010. The trade body does not provide a breakdown of specific company figures or differentiate between closed and open books.
Highclere Financial Services partner Alan Lakey compared the ABI’s overall proportion of CI claims paid to the claims paid statistics available from active insurers and calculated that active insurers’ claims paid rate for 2010 was 91.8 per cent, compared to 86.1 per cent for closed insurers.
Of the insurers approached by Money Marketing, Phoenix, Zurich and Unum did not provide the CI claims paid rate for their closed-book business.
Skandia, which withdrew from the CI market last September, had a claims paid rate of 88.2 per cent for 2010.
Windsor Life paid 89.1 per cent of its CI claims in 2010.
A Phoenix spokeswoman says it does not publish claims paid statistics because calculations differ between companies. She says: “We follow all industry best practice guidelines and as a closed provider that reinsures most of our CI policies, we have no incentive for turning claims down.”
Zurich head of protection and underwriting on the protection proposition team Phil Brown says Zurich does not differentiate its CI claims statistics between products that are currently available and those that are not.
Brown says: “We treat all claims exactly the same regardless of the company name under which the policy was taken out.”
Lakey says: “There may be a genuine reason for the difference in claims paid rates but this would come out if insurers supplied the figures. The insurers cannot say they are fair and reasonable and not disclose the figures.”