Scot Wids pays out over £219m in life and CI claims

Scot Wids pays out over £219m in life and CI claims

Scottish Widows has become the latest insurer to publish its protection claims statistics, showing more than £219m was paid out in life and critical illness claims in 2015.

A total of 9,639 individuals and their families were helped with the financial and emotional impact of critical illness or death.

The insurer paid out 98.9 per cent of life claims, in line with the claims paid in 2014, and 90.5 per cent of critical illness claims, an increase of 0.9 per cent compared with 2014.

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The total number of claims paid for life cover was 7,649 and for critical illness it was 1,990.

Since January 2000, the total amount Scottish Widows has paid out to its customers across both life and critical illness claims stands at £2.1bn.

Scott Cadger, head of underwriting and claims strategy at Scottish Widows, said his team was committed to paying as many claims as possible as quickly as possible.

“We’ve worked with charities and industry experts to speed up our time taken to pay claims by more than 35 per cent over a period of 18 months,” he added, clarifying this was between May 2014 and December 2015.

Critical illness – key statistics

The total amount paid out in critical illness claims was £79.1m.
The three main reasons for women making a claim remain cancer (74 per cent, of which half breast cancer), stroke (6 per cent) and multiple sclerosis (6 per cent).
Among men, 52 per cent of claims made were for cancer, 22 per cent for a heart attack and 10 per cent for stroke.
The average size of claim paid was £35,573 and the highest individual claim was £592,527.
The average period in force before a claim was 5.4 years and the average age of people who claimed, excluding children’s claims, was 49.

Mr Cadger stated that the industry had done to support initiatives such as the Seven Families campaign to increase people’s awareness of the need for financial protection, as too few take out cover.

He said: “As a result, millions of families are exposed to potential hardship should the unthinkable happen without having any safety net in place.”

Of the life claims, 0.89 per cent were declined due to misrepresentation and 0.26 per cent due to the definition of terminal illness not being met.

Of the critical illness claims, 6.7 per cent were declined due to the definition not being met and 2.9 per cent due to misrepresentation.

Adviser view

Damian O’Connor, managing director at Roxburgh Financial Management, said the paid claims statistics are broadly in line with the rest of the market.

“Life cover should be paying out more than CI, as there can be no decline for not meeting the definition. The level of detail of their data is good and I certainly welcome all moves by providers to be open and transparent on which claims they pay and which they decline.

“It’s very important for consumer confidence – the public tend to think insurers decline far more claims than they actually do.”