Pioneer Friendly Society has lived up to its name and become the first provider to reveal its declin...
Pioneer Friendly Society has lived up to its name and become the first provider to reveal its declined income protection (IP) claims statistics, writes Johanna Gornitzki.
Industry experts have applauded the insurer's brave move, arguing more companies should follow in Pioneer's footsteps in order to highlight the importance of IP.
Kevin Carr, head of protection strategy at LifeSearch, said he was delighted that Pioneer had decided to reveal its IP claims statistics.
He said: "This is a great move. By revealing its claims statistics, Pioneer is helping advisers to demonstrate to their customers the true value of IP. I urge other providers to take a leaf out of Pioneer's book and publish their IP claims figures too."
According to the insurer, it paid out 96.57% of all the IP claims it received in 2005, with musculoskeletal and back injuries accounting for most of the claims, amounting to 20% and 17.10% respectively.
Of the 3.43% of the claims that were not paid out, 25% were rejected due to non-disclosure and 23% were declined because exclusions applied.
Commenting on the figures, Pioneer's chief executive Andrew Chapman said: "Claims statistics have rightly been the subject of great interest recently as they are a litmus test of the industry. Insurance should not only be affordable but also effective. Pioneer prides itself on putting its customers' interest first, and this is demonstrated by our straightforward approach to the payment of claims at a time of crisis for our policyholders."
The claims statistics also went on to reveal that 17% of claims were declined due to the fact that the policyholder was receiving full sick pay from their employer. This statistic raises questions over the quality of advice given to these clients as, for them, paying the premiums would have been a waste of money.
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