In the longer term public dissatisfaction could prompt a radically different model. A peer to peer community may develop where group decisions are made on who to pay claims to based on the merits of the claim event. The community could then decide what “critical illness” really means to them on a case by case basis. It will be fascinating to see if this consumer owned approach can be harnessed by insurance companies or if it will grow outside traditional sources.
More pragmatically this is another case that highlights why Income Protection may be a fairer form of insurance – or a safer bet for the consumer. IP is blind to the reason for an illness but only looks at the effect – measured in terms of ability to work. This can result in claims payments more in line with actual loss than the lottery style payments that can be associated with CI.
More than anything right now, we all need to think about how we explain declined claims when they occur – and work together to ensure that they happen less and less often in the future.
Andrew Wibberley is director of Alea Risk