Although claims statistics are integral to building consumer confidence, the findings of this research show that the message isn’t getting through, which could be fuelling low take up of products.
For those respondents who had taken out a protection policy, their decision on product and provider was influenced first and foremost by price and then product features. The claims history of the provider was ranked the lowest influencing factor.
Dougy Grant, Protection Director at Aegon UK, said:
“We are constantly hearing that the key barrier to closing the protection gap and getting consumers to invest in protection products is lack of confidence in providers to actually pay claims. Worryingly, in spite of industry figures showing the highest number of pay outs ever, there is a perception among some consumers that only half of claims are paid.
“As an industry we need to pull together to make better use of claims statistics to help the sale and tackle fears that claims don’t pay
out. We need to think of ways to work with advisers to change peoples’ mindset and stop it being a barrier to protection sales.
“This research does make me question the importance of claims statistics. It’s always been a key time of year for the industry when we release this information, but stopping there is simply not enough.
“We support activity to help advisers give clients the confidence to buy protection and continue to work with advisers to provide material to explain claims statistics to their clients.”
Dan Sharpe, Director at The Insurance Surgery, said:
“There is a large piece of work around the best ways to improve public perception of the protection market, which would definitely include claims statistics as they clearly show how successful we are as an industry.
“Claims statistics help to overcome some of the major objections to help advisers to highlight the value of protection and differentiate it from other products such as PPI, which is still an issue.
“Very few clients ask about claims statistics suggesting that they don’t form a major or even minor part of the decision making process currently. Better use of claims statistics and more emphasis on how successful we are as an industry at paying claims would be a great way to reverse this. Claims statistics are a great way to illustrate the need for protection and reinforce an industry success story.”
Last month Aegon UK published claims data which showed a total of £113m was paid in claims for life (including terminal illness), critical illness (CI) and income protection (IP), helping more than 1,200 customers, families and businesses in 2014.
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