Should more providers take a leaf out of Pioneer Friendly's book and publish their declined income protection claims statistics? Would this help rebuild consumer trust?
Market views
Peter Le Beau, Le Beau Visage
I am very supportive of Pioneer's initiative because it should underline the number of claims the industry actually pays.
It is interesting that the Mail on Sunday has recently started to publicise income protection claims not paid. If we as an industry do what we usually do, which is to meekly hide our heads in the sand rather than confronting the problem, the perception will grow that claim declinature is a more significant problem than it actually is.
In fact I think I would want to publicise the number of claims that were turned down through fraud or non-disclosure, because there is nothing wrong in taking a fair approach to claims and letting people know that if they are honest in their claim application they have nothing to fear. If that is not true, then we as an industry have some serious soul-searching to do.
I think the potential for public scrutiny of claims statistics will focus our thinking on whether our stance on claims is defensible and appropriate.
In an era where we are being urged to treat customers fairly, there can surely be no fairer approach than to reveal this sort of information and to give potential customers an idea of the claims we will pay and those which will not be paid.
If we seek to obfuscate in this area all we will do is to build on the atmosphere of distrust that already surrounds our industry.
Jason King, Torquil Clark Life Insurance
We can all recall the struggle brokers had to get providers to disclose the same data for life and critical illness products two years ago. Providers then were reluctant to release such data, but pressure from brokers and consumer bodies meant that more providers relented. This has led to a debate on the issues around non-payment of claims, the reasons, the effect it has on consumer confidence, and how non-payment can be minimised.
The end result is that armed with such data, advisers have another quality to benchmark when selecting products and providers, and this all helps the industry move away from the cheap-as-chips culture that has engulfed protection distribution in recent years.
Brokers should regard this change in attitude from providers as a small victory for collective 'broker power' and take confidence from it to demand more of the same from our providers. Non-payment of claims under any insurance contract is an important issue and we should be given the data we need to help identify if there is a problem. Only when we know a problem exists can we do something about it.
As an industry, if we can then demonstrate that we are addressing consumer concerns and improving products, policy wordings, working practices and the like, then an improvement in consumer confidence is inevitable.
I would like to see claims statistics not only for income protection (IP) but also for mortgage payment protection insurance, private medical insurance, motor, home, warranty and everything in between as well. Now, that would be treating customers fairly!
Gerry Warner, Zurich
There can be no doubt that the release of claims information - paid and declined cases - is a positive step that should help build greater trust with consumers over time. However, it is important that such figures are put in the right context, as otherwise there is a danger they are simply converted into what could be misleading league tables. Right now, there is no common currency. Does a phone enquiry or request for a claim form count as a claim, for example?
The release of more claims information on IP is a logical step, acknowledging that commentators could seize on headline figures as 'evidence' that insurers are looking to avoid claims. We want to pay all legitimate claims, but owe it to all policyholders not to pay claims without foundation.
As an industry, we help a huge number of policyholders maintain a decent standard of living through trying times. Payments are often supplemented with support to help the return to a normal working environment.
From our own perspective, we monitor claims at a detailed level and analyse the root cause of declined claims. We will be reporting our statistics as a part of coordinated customer communication, which will not only highlight the many claims we pay and the benefits our policies bring, but also a rationale for claims declined and the lessons that can be learned in terms of issues like non-disclosure. We are also reviewing our annual statements to reinforce the key messages.
Penny O'Nions, The Onion Group
In principle, I think the publication of claims statistics is a good idea, but I am not sure members of the general public would correctly interpret the data in the context of the number of contracts sold by a particular company or the significance of disclosure levels.
I believe that transparency is necessary if the public are to gain confidence in the industry. However, many people see insurance as a form of gambling, heavily weighted against them, and we all know statistics can be presented in a number of ways depending on who wants to show what, so my concern would be that clients could misconstrue the information as reinforcing that belief.
While the information would be useful to IFAs, I doubt it could be presented in such a way that would make much difference without contravening the Data Protection Act. At a time when the Government is withdrawing the safety net of social benefits, the number of self-employed is rising and demographics are changing, it is increasingly important that advisers highlight the importance of taking responsibility for one's own protection needs. As IP should be high on their list, let's try not to do anything to put people off buying it.
