AIG Life has paid out 90.2 per cent of critical illness and children’s CI protection claims in 2014.
According to figures for the life and protection provider, this equates to a total of £13.7m paid out for CI and children’s CI claims in 2014.
AIG also paid out 92.2 per cent of life insurance claims – an increase of 7.8 percentage points on life insurance claims paid in 2013.
The average sum paid to critical illness customers was £71,000.
Kevin Carr, chief executive of the Protection Review, said: “On average the number of protection claims paid has increased by approximately 15 per cent since 2005. Back then, when issuing claims statistics was relatively new for most providers, approximately 80 per cent of critical illness claims were paid. Today the latest collective ABI data shows that this figure now stands at 91.8 per cent.
“Industry developments to prevent innocent and fraudulent non-disclosure have played a huge part in ensuring more claims are paid each year. The transparency involved in issuing claims stats will also have brought greater scrutiny to why claims were being declined.”
Steve Casey, head of marketing and propositions at AIG Life, said: “The figures are in keeping with the size and maturity of our portfolio. The percentage paid figures are higher than last year, which we predicted would be the case.
“Of greater importance, however, is to look under the headline figure and understand the causes of claim. The percentage of claims paid for a children’s critical illness on last year’s figures demonstrates the importance of having a financial parachute in place should a child fall seriously ill.”
Adviser view
Tom Conner, director at East Sussex-based Drewberry, said: “The life insurance pay-out rate looks a bit low. The average last year across all major insurers was about 98.5 per cent, so it would be interesting to know how it accounts for the difference.”
Key statistics:
The average age of critical illness claimants was 43.
Cancer remains the most common cause of critical illness claims at 53 per cent.
The number of children’s CI claims rose from 12 per cent of claims in 2013.
