Research: Industry speaks with one voice against Prudential's declined claims survey
By Lucy Quinton
Prudential received a heavy bout of criticism from the industry after the insurer published research on declined claims statistics, which experts argued were "deeply flawed".
Industry commentators branded the publication of the study as an "attack on the industry as a whole" after Prudential published findings suggesting that over the last five years there was £43.9bn of rejected protection insurance claims across Britain.
The provider asked 2,065 people between the ages of 16 and 64 just two questions - have you ever received a declined claim and, if so, how much for? A total of 39 people - which was the largest response to any one question in the survey - answered that they had a declined death claim, which suggested that people were confused by the question and answered on behalf of their wider family. This implied the statistics were flawed, according to industry experts.
The market has reacted strongly against Prudential's move to publish such statistics. Nick Kirwan, chairman of the Association of British Insurers Protection Committee, said: "This is outright scaremongering. My worry is that advisers are going to find it harder to sell protection following the release of this research. It is an attack on everybody, including advisers and Prudential. In effect, this is an attack on the whole industry."
He added: "If they have any shred of decency, they will either justify the reasons they published the research or put their hands up and admit it was stupid."
Mark Locke, spokesperson for Aegon Scottish Equitable, said he had no problem with innovation but did have concerns with irresponsible marketing.
Agreeing with Locke, Peter Chadborn, principal of CBK, said: "This is taking marketing too far. This is a potentially damaging headline for the consumer press to pump out every time there is a declined claim."
Locke added: "The figures are flawed. There is always bad press on declined claims but critical illness (CI) has actually helped many people - lots of claims have been paid. It has to be put in to perspective too."
However, Prudential defended its move. John Perks, director of protection at Prudential, said: "It is already public knowledge that one in five CI claims is rejected. All we've done that is different this time is to put a figure on it over five years for all protection products. Indeed, the thing that will turn the public off protection is not our research, it is the fact current products are not treating customers as fairly as they could do."
He said Prudential was strongly supportive of advisers and added "IFAs are as much a victim of rejected claims as customers are, as rejected claims erode the all-important relationship advisers have with their clients".
