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AXA latest to back Health Insurance calls for IP claims stats

October 2008 News

AXA is the latest big name insurer to promise to publish statistics that show the number of consumer income protection (IP) claims that it pays and declines.

The provider, which launched its Protection Account proposition in 2004, said that although its book of IP business is currently too small to offer any meaningful insight into the proportion of claims that are paid, it believes that publishing claims statistics is “a good thing” and something which it intends to do in the future.

The pledge follows a continued campaign from Health Insurance to force providers of IP products to be more transparent about how many claims they decline. Although an analysis of paid and declined IP claims statistics is thought to be complex, there is a growing body of evidence which suggests that consumers and financial advisers would find it reassuring to know that their insurer is committed to paying a claim when it is valid and that paid claims data would go a long way to help.

In an interview reported in this month’s Health Insurance, Stuart Lawson, protection marketing manager at AXA, said that although the provider has not published its claims stats to date because it has only been in the market for a short time, it believes it is important to do so from a transparency point of view.

Lawson told Health Insurance: “Given the greater profile of stats in the industry – for life and critical [CI] – we see it as a good thing. AXA is very much into paying claims and publishing stats is something we are looking to do. Three to four years is when a book of business is large enough to make stats meaningful, which is why we are doing work on it now.”

CI providers have published their claims statistics for years, but some have expressed regret at doing so because the declined rate has generated a good deal of negative coverage in the consumer press.

Currently, only six providers of consumer IP insurance reveal the proportion of claims that they pay. They include AEGON Scottish Equitable, Cirencester friendly, Dentists & General, Holloway Friendly Society, LV= and Pioneer. Other providers suggest that the differing models of IP insurance make it difficult to come up with an industry standard of what is and what is not a paid claim.

However, it has now been almost two years since a White Paper published by the Income Protection Task Force, an insurer-funded body set up to promote the product to consumers and other stakeholders, stated that there was already a “trend” of publishing claims statistics that illustrated the fact that the proportion of claims paid under IP is better than any other protection product other than life insurance.

Although the IP Task Force said in 2006 that “this message must be shouted loud and long as the consumer and the media believe the opposite” and that “IP has one of the best payment ratios of any product except life insurance”, providers have in reality been slow to actually reveal those ratios and the “trend” appears to have in fact failed to materialise. News that AXA is to publish its stats, however, could prompt more providers to reconsider their position.

“Show us yer stats” – read the feature in full on page 38 of this month’s issue.