There are a number of reasons why these statistics are failing to get through to consumers. For Steve Casey, head of marketing and propositions at AIG Life, the problem is that cold statistics do not sit well with what is often a very personal purchase. “The insurance industry is using a very analytical solution for what is really an emotional question,” he says. “I would prefer to see more positive case studies, such as the Seven Families campaign, to convey the importance of the product.”
In addition, while insurers’ marketing departments might obsess about their claims statistics, in keeping with Aegon’s findings, not all advisers see them as a key message for their clients. Alan Lakey, managing director of CI Expert, is fairly blunt about his use of claims statistics with his clients. “I never talk claims statistics with my clients and they never ask about them,” he says. “Clients trust me to take into account factors such as the insurer’s service record and reputation when I make a recommendation: they do not need to know these statistics.”
He also believes the statistics only tell part of the story about protection claims. “A claims paid figure of 90 per cent looks great but a cynic would still point out that one in 10 claims are declined,” he adds. “The reality is that the 10 per cent that are declined are likely to be split between non-disclosure and the policyholder not meeting the definition. The industry could do more to stop non-disclosure but we cannot stop someone with a broken leg putting in a claim for total permanent disability.”
Time for change
There is appetite for addressing the issues with claims statistics. A recent poll on Protection Review’s website found that just
7.69 per cent of its readers, which include advisers, insurers and reinsurers, wanted to maintain the status quo when it came to publishing claims statistics. A further 4.62 per cent said they would be happy to stop publishing them altogether, leaving the vast majority, 87.69 per cent, keen to carry on using them but work together more to promote the key messages.
A number of ways forward are under discussion. For example Aegon’s Mr Grant is keen to work more with advisers to help them promote the high claims rates. This would also include providing them with more detail around the claims declined as well as those paid.
Providing more detail is a step welcomed by Emma Thomson, life office relationship director at LifeSearch. “Consumer trust is far too low; having an open approach to producing claims data that includes details of how many claims are paid and what policyholders are claiming for as well as explaining why a small proportion are declined can only help to restore consumer confidence.”