This is the second in a series of features highlighting key findings from Pacific Life Re's consumer research on consumers' perceptions of protection claims management.
How do consumers think we should deal with misrepresentation?
Our research found that almost 60% of consumers ranked misrepresentation or something similar as the main cause for declined life claims.
So, we wanted to dig further and find out how consumers expect insurers to treat misrepresentation.
To explore this, we presented them with a number of hypothetical scenarios, such as the following example:
"A person who applies for life insurance doesn't tell the insurer about their high cholesterol and raised blood pressure before they take out the insurance.
"Had they done so, they would have had to pay twice as much for their life insurance cover. A year after they bought the insurance, they make a claim".
The results here indicate that our survey sample recognised the link between the cardiovascular risk factors and cerebrovascular or cardiovascular events.
The majority would also expect insurers to apply a penalty in these circumstances.
The result for suicide stands out, but the most likely explanation for this is that many consumers do not expect this to be covered under a life insurance policy.
There is some similarity between how our survey sample responded and industry practice.
In a recent benchmarking exercise, we asked claims managers how they would treat misrepresentation of cardiovascular risk factors across a number of different scenarios.
When it comes to claims assessment, consumers appear to understand a broad range of the concepts that underpin what we do, including the rationale for imposing penalties for misrepresentation.
We will explore more around consumer expectations in terms of misrepresentation, including thoughts on linked and non-linked claim causes in our final report, due to be published next week.
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