Insurance payout rates have been improving but many consumers still think that insurers do not pay out as much as they really do, according to financial advice firm Drewberry.
The company has surveyed consumers who believe that only 50% of life insurance claims were paid out by insurers in 2015, the Financial Times
The figure is a far cry from the statistics released by the Association of British Insurers, which showed that way over 90% of claims were paid out last year.
“The percentages of claims that are paid by protection insurers are generally excellent and have improved enormously over the last 10 years,” Drewberry director Tom Conner was quoted as saying in the Financial Times
“Despite this the general public have the impression that payout rates are truly appalling,” Conner added.
Conner said insurance companies are at fault for the poor consumer awareness.
"Insurers have become very good at releasing and publicising their payout rates among the adviser community but have made no attempt to advertise these impressive rates directly to consumers,” the Financial Times
quoted him as saying.
“And as such, there has been very little change in consumer perception since these rates started being published a number of years ago.”
Drewberry is now launching a campaign to raise awareness among consumers of how high payout rates are for insurance products.
The firm aims to reveal the actual payout rate and a breakdown for life insurance, critical illness cover and income protection.
Ninety seven per cent of protection insurance claims are paid
Travel insurers paying out £1 million every day