Zurich announces increase in 2017 protection claims paid
Swindon, April 13, 2018
- Cancer remains most common cause of critical illness claims and mental health for income protection
Leading UK life insurer, Zurich today announces that it settled 97% of all retail protection claims last year with payments of over £235.2m to 2,872 customers’ and their families. This compares to 95% of claims paid in 2016 worth £224.6m.
Critical illness claims
95% of all critical illness claims were paid in 2017 to 867 customers, with payments amounting to over £65.2m. Cancer alone accounted for 59% with £40m in payments to support customers affected with the disease. Heart attack was the second most common reason for claims, accounting for 14%, followed by Stroke and Multiple Sclerosis – 6% and 3% respectively.
The average pay out for a critical illness claim last year was £75k. Just over half of claims were from men (54%), with the average claimant being 52 years of age compared to 49 years for women.
A smaller number of claims were paid out last year for children covered by their parents’ policies (34 in total) amounting to over £647k.
Of the small number of claims declined, 3% were where a customer hadn’t disclosed key medical information on their application such as lifestyle (smoking or drinking habits) or existing medical issues, and 2% were because a condition claimed for wasn’t covered by the policy.
The vast majority (99%) of life claims were paid in 2017 benefitting 1,929 customers with payments of over £144.6m.
Where claims were declined, this was for non-disclosure of important medical information on application forms – for example, lifestyle (smoking or drinking habits) or existing medical issues.
Over £8.8m was paid out to around 500 income protection customers, with average monthly payments of £1,475.
There were 76 new claims last year and over 87% of these were paid. Ten of claims were not paid over the period, including seven where the policy’s criteria were not met and 3 where customers returned to work before the policy’s payment period started. In these examples, while no financial payment was made to the customer, they will have had access to rehabilitation support such as counselling, or physiotherapy to help them back to work.
Mental health including depression, anxiety and stress was again the most common reason, accounting for 22% claims, followed by musculoskeletal conditions (18%), cancer (15%) and neurological illnesses (14%) such as Multiple Sclerosis.
The reasons for claims over the period again highlight the importance of early intervention and rehabilitation support. Separate Zurich* research shows that for certain longer-term conditions such as stress and musculoskeletal issues, those who benefit from early support are more likely to make a speedier recovery and return to work.
Peter Hamilton, Zurich’s Head of Market Management said, “Research periodically suggests that customers aren't necessarily confident that these kind of plans will pay out - these figures evidence that the overwhelming proportion of claims are successful. We know that the likelihood of claims being paid is a key factor in helping customers decide whether or not to buy life insurance including income protection and critical illness. Our own research has also found that a quarter of people do not have cover as they think it's too expensive and nearly a third don’t think it is relevant.
“We hope that sharing this information helps to chip away at the commonly held view that insurers don’t pay out. Having cover like this in place means people can maintain their standard of living without having to worry about covering large costs like mortgages while they’re trying to deal with serious illness.
“We’re also keen to highlight the extra support available to customers through their policies such as professional counselling, therapies and advice on everything from sourcing suitable elder care through to money management.”
* Income Protection and Rehabilitation - Working Together, December 2015