Providers must report their claims stats in a consistent way, or risk undoing years of hard work
A few months ago, I wrote in Health Insurance that critical illness (CI) claims statistics may have achieved their original aim.
With insurers now consistently paying out over 90% of claims, I suggested in my September column that the industry has proved its worth to consumers on this particular issue and should consider focusing on another area in order to continue to improve confidence.
That, however, was based on an assumption that providers’ stats were entirely consistent, which now looks to be false.
Since I wrote that column, I have done a bit more digging and I have learned that there are key discrepancies in the way that different providers report their statistics.
Some, for example, include claims for things like children’s cover and partial payments, whereas others do not.
Meanwhile some are beginning to ask why providers such as PruProtect, which has now been trading for almost five years in the UK, are yet to publish their stats.
As you can read here, I challenged all the major providers to confirm exactly what they include in their statistics and why. The results were surprising to say the least – some included total and permanent disability (TPD), children’s claims and partial payments, while others included none of these, or just one or two.
Providers’ reasons for reporting their statistics in the way they do often cited ‘consistency’. Bright Grey and Scottish Provident, for instance, say they exclude TPD from their stats in order to be “consistent with industry reporting”, arguing that it has been common practice across the industry to omit TPD historically.
And yet two of the major providers – Legal & General and LV= – do include TPD. Not so consistent then.
Similarly, Aviva says it does not include TPD, children’s claims or partial payments in its stats for ‘historical consistency’ – TPD has often been an optional benefit, while children’s cover and partial payments are relatively new developments.
But with four of the major six providers who offer partial payments including them in their statistics despite the fact that this is the most recent development of all for the industry – it has really only been introduced in the past two years by most providers – that logic doesn’t appear to stack up.
Perhaps the insurers just haven’t been communicating with each other, but the overall impression I get is one of inconsistency and an industry that is failing to keep apace with the development of its own product.
If CI has been improved with the addition of features such as partial payments in recent years, surely it is logical – not to mention in the industry’s best interest – to agree whether they should be included in stats or not going forward?
Otherwise insurers are merely making their own best guess at how to report their stats, and the result is a set of data which corresponds to different things, and risks being seen as outdated, or worse, not transparent.