Research from Association of Financial Mutuals (AFM) shows paid claims volume increase 39% in two years
The data shows that 95.1% of income protection (IP) claims were paid across AFM members last year, an increase from 94.4% in 2018. This compares to the 88.1% of all income protection claims paid reported by the Association of British Insurers (ABI) in 2018.
The research, which includes findings from 10 member organisations offering IP, shows that they paid out more than £26m in claims to nearly 7,500 policyholders in 2019. It also found that, like-for-like, the volume of claims paid across AFM members has increased by 39% over the past two years.
Of the 4.9% rejected claims, the AFM said 41% were as a result of non-disclosure; a further 29% of those rejected claims were where the claim was for an excluded condition or was outside the scope of the policy.
Martin Shaw, chief executive of AFM, said: "The uncertainty caused by COVID-19 has made people more aware than ever before about the impact of being unwell and unable to work. These results are testament to AFM members' commitment to paying claims whenever possible and demonstrate how they are working hard to make income protection accessible and easier to make a claim on."
The research also found that the main reasons for claims were general illnesses and injuries (24%), musculoskeletal problems (22%), accident/injury (20%), mental health 10% (doubled since 2017) and chest/nose/throat conditions (9%).
AFM said the average value of claims paid in 2019 was £3,473, with neurological and cancer claims being the most expensive and the average claim ran for 15 weeks.
The organisations involved in the research included British Friendly, Cirencester Friendly, DG Mutual, The Exeter, Holloway Friendly, Metfriendly, PG Mutual, Shepherds Friendly, Transport Friendly and Wiltshire Friendly.
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