9 July 2018
Helping people when they need it most - how our industry has moved on
Our industry has come a long way from the first claim on a “modern” insurance policy, following the death of salt merchant William Gibbons in London in 1584. The sum assured was £4800 which, at that time, was a huge sum when you consider that the average daily pay was 10 pennies. However, the claim process left a lot to be desired. A dispute as to the policy term being measured in lunar or calendar months saw a petition made to Queen Elizabeth I, the intervention of the Lord Mayor of London and a ruling in the Admiralty Court.
Thankfully we’ve moved on and there is welcome news from the recent joint Association of British Insurers (ABI) and Group Risk Development (GRiD) publication of aggregated 2017 individual and group protection claims paid statistics. They confirmed that insurers paid a record-breaking £5 billion (equivalent to £13.9m per day) in life assurance, terminal illness, critical illness and income protection insurance claims last year. Overall, 97.8% of claims were paid in 2017, helping vulnerable individuals and families cope financially following a life changing/limiting medical diagnosis or bereavement. In addition to the payment of a financial benefit, vulnerable customers also benefited from specialist emotional support and rehabilitation interventions.
The level of financial protection claims payment continues to run far ahead of public perception. Our research shows that people, on average, believe that only 34% of protection claims are paid out by insurance companies. It is therefore essential to build consumer trust and advocacy. We as an industry and profession should take every opportunity to highlight the percentage and amount of claims paid to consumers.
Even more welcome is confirmation that Scottish Widows paid out 99% of life and 93% of critical illness claims in 2017, above the industry average, and in monetary terms more than £204 million, an average of just under £4 million per week.
Scottish Widows has come a long way too since May 1816 when we paid our first claim following the death of Mr Brodie. It's interesting to see that just as we pride ourselves on the quality of our claim service today, steps were taken back in 1816 to ensure the £500 claim, equivalent to £34,100 in today’s terms, was paid quickly.
This claims data from ABI, GRiD and Scottish Widows enables us to quickly and confidently advocate ‘The Assurance of Insurance’ to UK consumers, plus demonstrate the promise of insurance, in essence - money, when you need it most.
Find out what Scottish Widows are doing behind the scenes to make every claim count