Pacific Life Re shares the results of its recent claims survey with COVER magazine in the first of a series.
Last year, we commissioned a survey of 2,000 adults in the UK to try to gain some insight into their views of protection claims management, what they consider the chance is of getting a claim paid, how we treat misrepresentation and, more generally, to get a “laypersons” view of claims practices in the protection market. This is the first in a series of emails highlighting our key findings.
We started our research by investigating what consumers’ perceptions are when it comes to claims – what percentage of claims consumers think are paid out and why claims are declined. Our findings are below.
Last year, we commissioned a survey of 2,000 adults in the UK to try to gain some insight into their views of protection claims management, what they consider the chance is of getting a claim paid, how we treat misrepresentation and, more generally, to get a “laypersons” view of claims practices in the protection market. This is the first in a series of emails highlighting our key findings.
We started our research by investigating what consumers’ perceptions are when it comes to claims – what percentage of claims consumers think are paid out and why claims are declined. Our findings are below.
Do consumers expect insurers to keep their promises and pay claims?
Claims tend to be represented negatively in the media, so we wanted to know what our consumer group thought about the proportion of protection claims that are paid. We asked consumers “What percentage of life insurance claims do you think are paid out?”
Claims tend to be represented negatively in the media, so we wanted to know what our consumer group thought about the proportion of protection claims that are paid. We asked consumers “What percentage of life insurance claims do you think are paid out?”
The most common answer was 71-80%; whilst this is low, it illustrates a greater understanding than the averages that are often quoted in the media.
Despite that, we think it is striking that less than 20% of consumers thought that more than 80% of life claims are paid when, according to figures published by the ABI, the actual percentage of life claims that were paid in 2015 was 98%.
Why are so many claims declined?
There is value in digging deeper to understand why consumers think that the industry declines so many claims. We provided respondents with a range of options and asked them to select the one that they believe to be the main reason that we decline claims. The results are surprising…
Whilst consumers are aware that a significant number of claims are declined due to what we call misrepresentation, whether they think we deal fairly with this is another issue, which we’ll explore next week.
Despite that, we think it is striking that less than 20% of consumers thought that more than 80% of life claims are paid when, according to figures published by the ABI, the actual percentage of life claims that were paid in 2015 was 98%.
Why are so many claims declined?
There is value in digging deeper to understand why consumers think that the industry declines so many claims. We provided respondents with a range of options and asked them to select the one that they believe to be the main reason that we decline claims. The results are surprising…
…58% of respondents believed that the main cause for declined claims was due to the policyholder not providing accurate information when they bought the policy.
To some extent, this result runs counter to the popular narrative that insurers rely on ‘small print’ or loopholes to prevent paying claims, and will go to great lengths to avoid meeting their commitments.
Still, 17% of our sample selected “insurance companies always try to avoid paying out” as the reason why they believe so many claims are declined, with a further 9% citing “loopholes” or “insurance companies being too profit driven in general”.
These findings might suggest there is more to be done to communicate these claims statistics to consumers.
Whilst consumers are aware that a significant number of claims are declined due to what we call misrepresentation, whether they think we deal fairly with this is another issue, which we’ll explore next week.
