Insurers erroneously declined protection claims in only a tiny number of cases in the last two years, despite the public's negative perception of the industry, a study suggests.
The number of life and critical illness claims decisions referred to the Financial Ombudsman Service (FOS) in 2007 and 2008 found in favour of the consumer was just 90, the Reinsurance Group of America (RGA) report shows.
This compares with a total claims figure of 56,000 over the same period, suggesting insurers get claims decisions ‘wrong’ in just 0.16% of cases. In total, insurers paid out £2bn in 2007 and 2008.
- Acceptance rates rose from an average of 98.4% in 2007 to 99.1% in 2008
- The overall decline rate fell by 44% from 2007 to 2008
- The total sum assured relating to declined claims fell from £25m in 2007 to £12m in 2008
- The percentage of declined claims across insurers varied between 0% and 9% in 2008
Critical illness claims
- Acceptance rates rose from an average of 85.5% in 2007 to 88.6% in 2008
- The overall decline rate reduced by 21% in the period 2007 to 2008
- CI decline rates attributable to non-disclosure fell by 55% in the period 2007 to 2008
- The total sum assured of declined CI claims fell from £51m in 2007 to £48m in 2008
- The percentage of declined CI claims across participating companies ranged from 4% to 22% in 2008