At a glance
- Zurich today announces that it paid out over £958 million in UK claims payments during the first half of 2017
- 99% of all claims paid across retail motor, commercial and life products including critical illness and income protection insurance
- Zurich research shows customers ignore insurance as they don’t believe claims get paid
Zurich today announces that it paid out 99% of claims in the UK during the first half of 2017 with payments worth £958 million.
Over 99% of all general insurance claims were paid, with 54 claims of more than £1m being made. Typically, the proportion of consumer home claims paid out is slightly lower at 95% – but this is improved on the level from 2016 and is well above the industry average*.
Zurich paid out 97% of all retail life claims including critical illness and income protection insurance during H1. Where a minority of claims were not paid, reasons include non-disclosure of medical information on applications and where an income protection customer may have returned to work before the policy’s payment period started.
These successful claim rates provide stark contrast to YouGov research** commissioned by the insurer showing that nearly one in ten people don’t insure themselves because they don’t believe insurers will pay out if they need to make a claim. While, over half of respondents (58%) said that ‘likelihood of an insurer paying out’ was the third most important factor in helping them decide which insurance policy to buy.
Commenting on these figures, Zurich’s UK Chief Claims Officer, David Nichols said, “We are committed to publishing our claim statistics right across the business to help reassure our customers that the vast majority of claims are paid year on year. Our own research throws up some alarming results, that too many people are taking risks and not insuring themselves as they believe insurers try to avoid their responsibility of honouring valid claims.
“We are hugely proud of our claims record and sharing this information so that more people understand insurance and its benefits. As well as payments made, many products have invaluable add ons such as professional counselling and rehabilitation, helping people and businesses get back on their feet.”
Why are some claims rejected?
Whereas almost all consumer motor claims are paid, this is not the case for retail home property claims. Of those 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. For example, 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.
For critical illness and life insurance, the main reason why claims are declined is for not disclosing key medical information on application forms – such as a history of smoking. While for income protection, a greater proportion of customers do not reach payment stage because they often return to work before the policy’s payment period starts, with many benefitting from rehabilitation available through their policy.
* Industry average claims statistics from the ABI for 2014 and 2015 showed that just 84% of home insurance claims were paid on average. More information can be found here.
** YouGov research carried out in July 2017 – 2000 GB adults
General Insurance Products
- Received over 100,800 new claims in H1 worth £747.8m
- Just over half were motor claims, with the rest split between casualty and property. [need to check this]
- 95% consumer home claims paid. Where customers weren’t paid, the main reasons were misunderstanding what they could claim for, wear and tea and not having the right cover in place.
- 99% of consumer motor claims paid
- 99% of claims paid for commercial customers
- 54 payments of over £1m
- Over 2000, new protection claims made in H1
- 95% of critical illness, 86% income protection and 98% life claims paid in H1.
- Average CI payment made during H1 was being £76k and monthly benefit for IP was over £1400
- £81k was paid in claims for children and £46k was paid to four customers with partial claims* (payments on newer policies for less advanced diagnosis of certain conditions such as cancer)
- Cancer was the biggest cause of critical illness claims and mental illness and musculoskeletal for income protection