Critical Illness Claim Statistics - 2009

OshayAway

It's the time of year when insurers publish their critical illness claim statistics. In 2006, the first year these figures were made available (for 2005), it back-fired somewhat as many felt concerned that circa 20% 1 in 5 claims were declined. That made it one of the most unreliable forms of insurance.

Since then, there have been several changes by insurers that have had a very positive effect on claims, cutting the declination rates considerably. By 2008, those rejected claims had more than halved.

These changes have been made to tackle the two causes for rejected claims:

• Non-disclosure - Added procedures and more emphasis put on importance of full disclosure etc
• Not meeting the policy condition - more comprehensive definitions / fewer exclusions applied.

Interestingly, in recent years the majority of claims (for the most part) that are now rejected are due to not meeting the definition rather than non-disclosure. Previously, it was the other way around.

Obtaining good advice about critical illness cover is very important as policicies do vary considerably in terms of how comprehensive they are.

Most recently, AXA have published their 2009 critical illness claim statistics:
93% paid 3% rejected for non-disclosure 4% not meeting definition
Source: https://advisers.axa.co.uk/pub/doc/documents/PRCS09.pdf?dm_i=3C5,3QGE,HJNTM,BSCM,1

Bright Grey:
93% paid 2% rejected for non-disclosure 5% not meeting definition
Source: http://www.brightadviser.co.uk/pressrelease62.html

I will post more critical illness claim statistics as and when they become available.

dunstonh

Since then, there have been several changes by insurers that have had a very positive effect on claims, cutting the declination rates considerably. By 2008, those rejected claims had more than halved.

Also helped by the FOS publishing how they would deal with non-disclosure cases. Everyone knows where they stand now.

pedro123456

Statistics by the Insurance bods, for the Insurance industry.

http://www.timesonline.co.uk/tol/money/insurance/article5859380.ece

http://www.bbc.co.uk/blogs/watchdog/2009/04/cancer_excluded_from_critical.html

OshayAway

pedro123456 wrote: »

http://www.timesonline.co.uk/tol/money/insurance/article5859380.ece

http://www.bbc.co.uk/blogs/watchdog/2009/04/cancer_excluded_from_critical.html

Very interesting Times article, positive on the whole I would say. There are always going to be reports of cases like the watchdog one, that's why the figure isn't 100%.

pedro123456

positive on the whole I would say :rotfl:

The number of life and critical-illness claims rejected for “non-disclosure” has tumbled as insurers soften their approach under pressure from the Financial Ombudsman Service (FOS). Campaigners welcome the shift, but say that the industry's favourite get-out clause remains a problem and a new code of practice is little more than a smokescreen.

Insurers are also under pressure from the Law Commission, which is consulting on non-disclosure and could push for new legislation. Peter Tyldesley, a solicitor and visiting lecturer in insurance law at the University of Manchester, says: “A code such as [the ABI's] is no substitute for law reform - it is not legally enforceable and most consumers will be oblivious to its existence. Legislation is the only effective answer. It holds no threat for insurers who behave decently and will give consumers the protection that they deserve

Mr Tyldesley's call is backed by Mike Hobday, of Macmillan Cancer Support, who says: “Too many cancer patients suffer terribly because claims are rejected without good reason. Macmillan wants to see strengthened legal requirements to protect people living with cancer from the distress of having to fight an appeal against their insurance company.”

A spokeswoman for the insurer says that most of that decrease has been achieved by making the rules on non-disclosure clearer to policyholders. :rotfl:But she does not accept that this exposes confusion in the previous system. :T “It is not that we didn't make things clear then,” she says. “We did. But now we are shouting from the rooftop.” :rotfl:

Mr Tyldesley says that this kind of talk is “reputational” and should not fool readers. “People will rightly ask why change was necessary if things were fair before,” he adds. “And those who were turned down unfairly in the past should try to revive their complaints.”

You sound like a spider inviting us fly's into your web :rotfl:, keep off the wine gums mate

OshayAway

Surely the figures speak for themselves. How do you feel about the 90% plus successful claimants Pedro?

Nicko67

I'd expect L&G’s stats to come in at something similar to those already reported. This is a massive boost for the industry and can only help reassure clients.

Shame the naysayers have to be so cynical.

pedro123456

Well Oshayaway its like this.

I think the 90% success claims (if correct) are the ABI’s way of trying to promote confidence from the public toward the Insurance Industry, the lack of public confidence is well documented and has led somewhat to the TCF http://www.fsa.gov.uk/Pages/Doing/Regulated/tcf/index.shtml being imposed by the FSA.

I think in general they are statistics, and like any statistic can be used and or twisted to suit the IC purpose, and I feel as this is what’s occurring.

The IC are saying 90% of claims are being paid out, and that most of the refuted claims are because the claimant “does not meet the IC definition”, well in most cases that’s a forgone conclusion, because the IC definition is often not the definition used by the Doctors/Consultants, in that the IC definitions have to have bells on !!!!!

Add to this that we are talking of a 10% claim rate in the first place, and it becomes clear the CI is not a product for the protection or peace of mind for the majority of the public, CI insurance is indeed a big money maker for the IC.

So in effect 9 out of 100 people are successful in claiming from CI policies.

I conclude it’s the ABI’s way of luring people into their snare, I guess it’s a case of just cutting their profit margins for a little while until they have persuaded some more members of the public to purchase more worthless policies.

Nicko67 “massive boost for the industry” :rotfl:

The public have no confidence in the industry, the ABI are presuming the public are gullible to fall for the spin, I like to think not, the public will continue to see the Insurance Industry in its true colours…………………….greedy

"come into my web" said the spider to the fly.

OshayAway

pedro123456 wrote: »

So in effect 9 out of 100 people are successful in claiming from CI policies.

Err... don't you mean 93 out of 100? Ask anyone of those 93 if they have confidence in critical illness cover and if they would reccommend it to their friends, family or anyone else.

I don't want to get into another argument Pedro, it's very frustrating because your comments don't stand up to reason and before long you just start spouting insults. But let me just ask you this, if you had your critical illness claim paid, would you be putting in this much effort to champion the value of the cover?

OshayAway

Ah, ok, just re-read your post and see what you are saying about 9 out of 100... talk about twisting figures!

I don't know where you got the 10% claim rate from, not a very fair figure to quote as the product is relatively young. But by that reasoning, you could also say less than 1 in 100 have a claim turned down and is it 1 in a few hundred due to not meeting the definition?

pedro123456

Ok AwayOshay seeing as you are in the Insurance Industry maybe you could enlighten us as to the claims rate for CI, seeing as you dispute 10%

As for your comment “I don't know where you got the 10% claim rate from, not a very fair figure to quote as the product is relatively young. But by that reasoning, you could also say less than 1 in 100 have a claim turned down and is it 1 in a few hundred due to not meeting the definition?”………..now if I read your statement a thousand times it wouldn’t make sense to me.


As I see it CI policies are designed purely and simply to make money for the IC’s simple as that, while being promoted as “good for the public”

-These CI policies are designed and written by the IC for the IC

-The T&C become their get out clauses and loopholes.

-The core definitions CI supposedly covered are the IC’s definitions, not GP/Consultant definitions.

-The IC’s are the decision makers, Judge and Jury in all claims.

Are they value for money? IMO no, but then I’m talking in hindsight having paid premiums since 1997 for this ‘relatively young product’, but as said this is my opinion.