Sector Claims Data AFM Claims Forum Martin Shaw, AFM
2018 Claims data collection: Income Protection All nine AFM Holloway/ Income Protection • providers Repeating 2018 exercise • Sector Claims PMI/ Health Cash Plan Data New exercise • Data from 12 healthcare providers • Life/ GI No data exercise, but some general slides • provided
Claims received in 2018: 6,061 Money paid in claims: Average claim (largest values) £26 million • Surgery £6,605 Mental illness £5,234 • Average value of claims: Income • Cancer £4,810 £4,539 Heart/ circulatory £3,414 • Protection WHAT PEOPLE Abdominal Claims 3% CLAIM FOR Other Accident/ Injury 23% 19% Surgery (not covered in other categories) Cancer 4% 4% Neurological 2% Chest/ lung/ nose/ throat Mental illness 11% 8% Heart/ Circulatory Musculoskeletal Hip/knee 3% 21% 2%
Variation in claims values by company 5865 5808 5600 average £4,539 4753 4233 4141 3485 3378 Income 2502 Protection Claims
Average duration of claims (weeks) 29 26 20 Average 16.2 weeks Income 16 18.1 15.4 Protection 11.3 Claims 5.5 4 The average claim lasts nearly four months. There are significant variances between organisations- product design may be part of the reason, makes a big difference to profitability.
PROPORTION OF CLAIMS PAID paid rejected Income 94.40% 93.70% Protection 87.20% Claims AFM 2018 AFM 2017 ABI 2017 AFM members received over 6,000 new claims in 2018, and accepted 94.4%, paying £26M in claims. This represents a further increase on 2017 and is almost 10% more than the industry average. The median level of claims paid was even higher, at 95.8%.
PROPORTION OF CLAIMS PAID paid rejected 5.60% 6.30% 12.80% Income Protection Claims AFM 2018 AFM 2017 ABI 2017 Of 340 claims rejected: 38% were for non-disclosure at application or during claims 29% for other policy criteria not met 27% for excluded conditions 6% for does not meet definition of disability
Proportion of claims not paid 12.5% Average 5.6% 8.2% 5.7% 6.1% Income 4.2% 4.0% 3.6% 3.1% 3.1% 2.8% 0.2% Protection L Y R T Y E L S L ) R R A R A R E A S A E E E N T E C N U C O O H N H N K E I I J R T G T M N L L T A A / O H E O P L O I O C L K T I I / U L ( H D T S L O / Y C A N O B E R R R T A E S L U E I N O U D C G E E I N C N R C / M S T U C / U Claims R G S A M A N E U H L / T S E H C Of 340 claims rejected: 38% were for non-disclosure at application or during claims 29% for other policy criteria not met 27% for excluded conditions 6% for does not meet definition of disability
Summary for PMI and cash plans in 2018: Premiums rose 4% Healthcare Claims value rose 9% Claims average value of £126.19 Claims numbers up 4% rate of 89 claims per 100 policies Claims accepted 96.8% 97.2% claims paid within 5 days (based on 4 PMI and 10 cash plan responses)
PMI Cash Plan 18% rise in claims v 2017 3% PMI v Cash 12 claims per 100 policies 148 Plan £1,380 average value/ claim £51 1% claims rejected 3.2%
PMI Cash Plan £196 Average Premium £110 PMI v Cash £1,131 Median Premium £124 Plan £163 Paid out per policy £76 83% Claims/ Premiums 68%
What are the Top 5 reasons for a claim? 88% for chiropody/physiotherapy/dental/optical (1.75 million claims in sample; 6 providers) WHAT PEOPLE Health Cash Prescriptions Chiropody/ CLAIM FOR 3% Physio Plans Optical 32% 20% In-patient 1% Health and Well-being 3% Complement Dental ary therapies 36% 5%
Fairly consistent structure of products, but higher claims experience not always matched by premium size Cash plan providers Health Cash 200 2.5 Plans 2.0 150 1.5 100 1.0 50 0.5 0 0.0 ave prem ave claim claims/policy
No two PMI policies are similar (average premium: £148; median: £1,131) (average claim: £126; median £2,237) PMI policy variances Private Medical 7000 70% 6000 60% Insurance 5000 50% 4000 40% 3000 30% 2000 20% 1000 10% 0 0% ave prem ave claim claims/ policy
FCA already publishes claims data for some products, including home, and Fairer Finance rates some GI firms General Insurance Claims
ABI stats for 2017: 98% of Life product claims paid 99.99% of Whole of Life Life Insurance Claims No data on with-profits maturities: Last data AFM obtained showed mutuals 17% better returns (2014)
The results paint a positive picture about the intent of the sector to pay claims. Income Protection Sector Claims AFM to produce press release • Data Data shared with ABI • PMI/ Health Cash Plan Not for external release, though • results will aid our lobbying work
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