At a glance
- In General Insurance, the overwhelming majority of all claims were paid out and 17 payments of over £1m were made
- Zurich received over 115,000 new claims across personal and commercial lines
- 99% of personal lines motor claims and over 99% of all commercial claims were paid
Zurich in the UK has announced that more than £1bn was paid out in claims during the first six months of 2016.
Approximately 30% of this figure was paid from the Life business, with the remaining 70% from General Insurance (which includes Zurich’s commercial and personal lines businesses in the UK).
Zurich has been publishing the proportion of claims paid on Life products for some time, but this is the first time we have published this level of detail for General Insurance claims as well, and represents a belief that the industry can do more to increase its transparency.
In General Insurance, the overwhelming majority of all claims were paid out by Zurich, and 17 payments of over £1 million were made. The lowest proportion of claims paid came from personal lines home cover – where the amount paid was slightly over 91%. This is higher than the market average and the main reasons for claims being turned down were due to customers not understanding what is and is not covered before starting a claim.
Zurich’s UK Life business paid out 95% of all claims. This includes almost all Life claims between January and June (98%) and over 89% of Critical Illness claims. Where a small number of claims were declined, this was either because the customer’s condition did not meet the definition set out in the policy or because of non-disclosure of medical information.
Highlights of Zurich UK’s £1bn claims paid in the first six months of 2016
Zurich UK’s General Insurance business:
- Received over 115,000 new claims across personal and commercial lines
- Paid 99% of personal lines motor claims
- Paid 91% of personal lines property claims. Where claims weren’t paid, the main reasons were related to customers’ misunderstanding on what they could claim for. Wear and tear, and not having the right cover account for around 80% of these reasons (see below for more details)
- Paid over 99% of claims from commercial customers (where roughly a quarter were motor, and the rest evenly split between property and casualty)
Commenting on these figures, Zurich’s UK CEO Gary Shaughnessy said:
“There is often a misconception that insurers shy away from paying claims – but by publishing these numbers we are trying to lift the lid on the fact that the vast majority are paid. £1bn is a huge number and it is fantastic that we are able to help our customers when they need us most – after all, that’s why we’re here.
“There will always be some claims which aren’t paid for a number of reasons, but these figures suggest we can do more to help people understand what is and is not covered by their policies so we don’t have to turn people down. We are continuing to invest in our claims processes across Life and General Insurance to ensure we can help people as swiftly as possible, and also to ensure that our fight against insurance fraud remains robust.”
Why are fewer Personal Lines property claims paid?
Whereas almost all retail motor claims are paid, that isn’t the case for retail home property claims. Of those claims turned down, the overwhelming reason is because customers make claims for damage caused by wear and tear – which is not why insurance exists. The second most common reason is where customers make a claim, but do not have the appropriate cover in place. Examples of this could be making a claim for an accident – but not having taken out a provision for accidental damage – or claiming for damage in the garden where this isn’t part of the policy cover. Wear and tear, and not having the right cover account for around 80% of declined property claims. There is more for the industry to do as a whole in terms of helping people understand what their insurance covers – and Zurich will do its part to tackle misunderstanding.