The industry can now boast a full set of claims statistics from all the major providers, following Friends Life publication of income protection figures. But how much work is there still to be done? And how realistically possible is complete standardisation of how providers format their statistics?
Dean Mason, practice principal, Masons Financial Planning
While standardisation is long overdue in my opinion, the increased openness of insurers and re-insurers in their willingness to make claims statistics public is not only highly refreshing it is also a potentially invaluable tool for advisers in terms of overcoming client objections.
But it is something that needs to be updated annually at least and surely any insurer who does not keep up with their peers, will clearly not share in the positive PR that publishing claims statistics should bring.
The promotion of the numbers is a key point here. Much of the talk is about standardisation, however getting the information through to customers (and not just relying on advisers) is just as important. There needs to be a much wider industry effort, not just a quick press release once a year.
The industry still has to cope with a public perception, which in many cases is still stuck in the 1980s. The key here as always is to do more than pat ourselves on the back. We have got to get those figures out in full into the public domain to redress the balance.
Standardisation would involve a lot of co-operation and whether this is feasible is a question for those at the top among the providers. From an advice angle, having a table or similar that tells me who is paying out the highest percentage of claims could be a key factor in any protection recommendation going forward, especially if other important factors were similar.
Derek Frost, partner principal, The Melia Partnership
There are a handful of different ways and methods providers can collect these statistics together. I would like to see a more standardised output so the statistics can be looked at and compared and measured realistically. This needs to be done if the publication of claims statistics is going to be a real exercise as opposed to a marketing exercise.
The statistics currently are subject to interpretation and we cannot see how they are being put together.
If we look to the ABI to standardise the process we have to consider the body’s will and its budget and whether it is prepared to invest in it. Also, how willing would the insurers be to step up and agree to standardisation?
With standardisation, it is where the skeletons will fall out of the closet if they have been doing something differently and there is potential there to damage the sector. But the only responsibility of providers is their commercial sustainability, so it does fall to the ABI to take claims statistics standardisation on.
From an adviser view, it would make 100% difference if there was complete knowledge and transparency with these statistics. At the moment I dare not rely on them when speaking with clients.
It is all going in the right direction and to have all the providers now is good to see. The FCA also has a small responsibility given it is now closer to product design. The issue with standardising claims statistics now needs a seriously focused eye.
