Royal London paid about 97.3% of claims in 2016 totalling over £331 million, the firm has announced. The move comes amid ongoing debate over whether providers should publish claims statistics.
Debbie Kennedy, Royal London’s group head of protection strategy, believes that doing so is “the right thing to do” to help the industry improve trust with customers. “Insurance is an important part of financial planning and consumers need to believe that a claim will be paid and can provide a much-needed financial cushion when the worst happens,” she said in a statement.
Almost half (47.3%) of the payments were for critical illness (CI) claims, with an average payout of nearly £83,000. Cancer was the most common reason (63%), followed by heart attack (10%), and stroke (6%). Almost all (92.2%) of CI claims were paid; 1.1% were declined due to misrepresentation and 6.7% did not meet the policy definition. The average age of a CI claimant was 48 years old and the average policy had been in force for 10 years and five months.
For term life insurance, 96.8% of claims were paid, reaching nearly £108 million and 90.9% of terminal illness claims were paid amounting to nearly £26 million. All whole of life claims amounting to more than £33 million were paid.
Royal London paid 95.6% of income protection claims totalling £3.6 million based on new claims and those already in payment. Of the claims that were not paid, 2% were declined due to non-disclosure and 2.4% for claim definitions not being met.
“As a member of the Association of British Insurers this is the first year we are also declaring claims based on the amount of new claims only, excluding claims in payment before 2016 that continued to be paid in 2016,” said the firm.
Kennedy said the firm is focused on improving claims experience. She emphasized its fast-track, where over 60% of claims in 2016 were paid in three days.
“In 2016, we stuck to our strategy of focusing on the most common reasons for claims by updating our definitions in these areas,” she noted. “By doing this, we are able to pay more claims for illnesses people are more likely to get. In times of crisis it’s important that our customers get the financial support they need as quickly and simply as possible.”
Major insurer reveals UK paid claims figures
Royal London paid 98% of claims in 2015