Royal London paid out 60 per cent of claims within three days in 2016 as it ramped up its fast-track payment process.
The protection provider paid out £331m in 2016, representing 97.3 per cent of the total number of claims made.
Nearly £1m was paid in free cover claims, which pay out on receipt of a valid claim before any premium has been collected from the customer – a useful option if a customer is waiting for a mortgage to complete.
Critical illness (CI) claims accounted for over £156m of payments last year, with an average payout of nearly £83,000.
Some 92.2 per cent of CI claims were paid, with 1.1 per cent declined due to misrepresentation and 6.7 per cent because they did not meet the policy definition.
Meanwhile, 96.8 per cent of term life insurance claims were paid, totalling nearly £108m, along with 90.9 per cent of terminal illness claims, amounting to nearly £26m.
More than £33m was paid in whole of life claims - 100 per cent of claims received.
In addition, 95.6 per cent of income protection claims were paid out on, totalling £3.6m based on new claims and those already in payment.
Of the 4.4 per cent of claims that were declined, 2 per cent were due to non-disclosure and 2.4 per cent because the claim definition was not met.
Debbie Kennedy, group head of protection strategy at Royal London said: “There has been much debate about whether providers should publish claims statistics.
“We firmly believe that it is the right thing to do to help the industry improve trust with customers. Insurance is an important part of financial planning and consumers need to believe that a claim will be paid and can provide a much-needed financial cushion when the worst happens.”
Michael Aldridge, innovation director at London and Country Mortgages, commented: “I salute Debbie Kennedy and the team for their dedication to improving the claims experience for consumers and the number of innovations in this space.
“To have paid 60 per cent of their claims within an average of 3 days is a significant stride in the right direction for the industry as a whole.”
simon.allin@ft.com
