Protection  

Consumers unaware of protection claims paid

Consumers unaware of protection claims paid

An overwhelming majority of consumers underestimate the number of protection claims paid by the industry, underlining a lack of consumer confidence in the industry.

A survey from provider Aegon found 92 per cent of UK consumers believe less than 90 per cent of protection claims are paid each year.

The figure contrasts with the Association of British Insurers’ findings in April, which showed 97.8 per cent of claims made across group and individual protection policies in the UK were paid in 2017.

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Aegon’s research addressed 1,300 adults in August 2018.

Aegon’s survey found respondents had correctly identified the two most common reasons providers did not pay claims - the provision of incorrect information about themselves and claiming for a condition not covered in the policy definitions.

The third most common reason cited by respondents for an unpaid claim was a belief that protection providers find "loopholes" to avoid paying claims.

Simon Jacobs, head of underwriting and claims at Aegon, said consumer confidence in protection and its providers remained low despite the industry paying out most claims it receives.

He said: "The fact that only 8 per cent of people believe that we pay more than 90 per cent of claims is concerning and shows that the message we do pay all valid protection claims is failing to reach people."

Mr Jacobs said in reality contentious claims are few and far between, suggesting just 2.2 per cent of all claims are not paid and usually with a clear reason.

He said: "Paying claims is at the heart of what we do - it is central to our business and as an industry we need to showcase claims statistics and stamp out any lingering doubt that insurers don’t pay legitimate claims."

Industry commentators have previously called on providers to consider changing their messaging.

Speaking earlier this year at the Protection Review conference in London, James Daley, managing director at Fairer Finance, said the industry would not improve its reputation by marketing its successful claims, but had a chance to do so by explaining the claims that are not paid.

rachel.addison@ft.com