When insurers' claims statistics are released every year, it can be easy to get confused at the sheer complexity and extent of the information released.
Plus, it can sometimes be difficult to see the point of such an exercise when the results can seem to be very similar across the board, with an average of 97.8 per cent of protection insurance claims paid in 2017.
However, customers and intermediaries need to know how the industry performs when it comes to paying out claims.
This isn’t solely about market competition or pitting one insurer against another; it’s about building consumer trust and confidence in the income protection industry.
Importantly, it’s about demonstrating that insurers will pay a claim when they say they will.
Claims statistics are an important tool in cultivating this trust. Would-be customers have a right to know exactly what they’re signing up for, rather than relying on headline figures of overall payouts.
Customers should be looking at statistics like average payout size, which areas an insurer typically paid out for, where the highest number of claims were made and, perhaps most importantly, where claims weren’t paid at all.
That is why we break down our claims statistics paid by reason to show the real picture behind the figures.
Vast experience in this area has shown us that it only takes one ill-timed fall to cause a major upset in a client’s life.
Given that almost 60 per cent of 2017 claims were due to musculoskeletal injuries, back conditions and fractures/broken bones, it helps to put in perspective the everyday chances of being ill or injured and not being able to work.
It’s this kind of information which helps clients to understand exactly what they’re getting.
Government figures show that 300,000 people fell out of work and into the welfare system due to health-related issues in 2014, and according to the Money Advice Service, one in three consumers experienced a shock to their finances between 2010 and 2015 alone.
These aren’t extraordinary and rare problems, they’re painfully common.
It’s therefore easy to see why the topic of declined payouts can be so emotive - it’s easy to focus on the feel-good stories where payouts are made as expected.
The protection industry works hard for customers and in 2016 paid out £13m per day in claims. Yet most people are much more concerned with the alternative.
However, the industry is held to the highest standards and there will always be a good reason and full explanation if a claim is not able to be paid.
Trust and transparency is an area where insurers’ claim statistics can and should be helping provide customers with the certainty they need to put their worries to rest.