ProtectionMay 7 2013

Friends cites ‘concern’ as it bows to transparency demands

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ByMichael Trudeau

Friends Life paid out 87 per cent of all new income protection claims in 2012, with 9 per cent declined because the medical definition was not met and 4 per cent declined due to non-disclosure.

This is the first time Friends Life has published its IP claims stats, and follows the publication of numbers from several other insurers including British Friendly which paid out 97 per cent.

Friends Life said received 497 total new IP claims in 2012. During 2012, 1,553 new and existing claims were reviewed by the insurer and 96 per cent of those continued to receive payments.

However, the company said it is concerned about how these figures are disclosed across the industry, with different opinions of what constitutes a claim or a declined claim potentially leading to ambiguous results.

Chris Pollard, head of underwriting, claims and operations for Friends Life Individual Protection, said: “We have listened to the market sentiment and are happy to reveal that, in 2012, we paid out 87 per cent of income protection claims.

“However, we remain concerned there is no consistent basis on which the industry discloses its income protection claims statistics other than via the ABI.

“Disclosure and transparency are positive things for the industry, but we strongly believe that the figures themselves need to be meaningful so as not to lead to incorrect conclusions.”