AIG paid a total of £69m in claims for life and critical illness insurance in 2016 – a more than 49 per cent increase on 2015.
The firm’s life insurance arm paid out 95 per cent of claims last year, totalling £46m - more than double the £19m it paid in 2015.
The average size of claim paid was £75,493, and the average age of claimant was 54, with cancer the most common cause of death (42 per cent).
Some 92.3 per cent of critical illness claims were paid (£23m), with cancer, heart attack, stroke and multiple sclerosis accounting for 83.5 per cent of claims.
Of all critical illness claims submitted, 2.8 per cent did not meet AIG Life’s definition of the condition policyholders were claiming against and 4.9 per cent were declined as a result of misrepresentation.
Debbie Bolton, head of claims and underwriting development, said: “We are in the business of meeting customers’ expectations to pay all valid claims, and we want to provide customers with as much backing as possible when life takes a terrible turn.
“When this happens, we offer them a full range of support services - from our Claims Support Fund to the independent worldwide second opinion medical service Best Doctors, the award-winning children’s bereavement charity Winston’s Wish and our recently announced Funeral Pledge. In doing this, we can provide so much more than financial support.”
Alan Lakey, director at Hemel Hempstead-based Highclere Financial Services, commented: “With companies like AIG it is no surprise that they are paying out more because not only are they fast-growing, they also cover conditions that other companies won’t.
“The misrepresentation figure is quite high - it is typically about 20 per cent. It may be because they have got a smooth online system which, while it works for advisers in getting the results they want, enables people to take advantage.
“They have got something like 80 per cent straight-through processing. The aim of the game for many companies is to reduce the time they spend writing to doctors, but the problem is it relies on the applicant being totally honest and up-front.”
simon.allin@ft.com
