Aviva is returning £81m to its private medical insurance (PMI) customers after claims and treatment were affected by the Covid-19 pandemic.
The payments amount to around six weeks’ worth of premiums for individual customers and about seven weeks’ worth for SME schemes for those covered throughout the whole period.
Payments to large corporate clients will be decided based on the claims experience of each scheme.
Customers and clients who paid a premium across the period 1 March 2020 to 31 March 2021 will be eligible for a payment, even if they no longer hold a policy.
The insurer will continue to monitor claims until the end of 2022 and if any further payment is made in 2023, this will include a 20% increase.
Returning to initial schedule
The figure represents Aviva’s current estimate of the difference between expected claims costs and actual claims costs for the period of claims monitored, from 1 March 2020 to 31 December 2022, when some treatments and procedures were delayed rather than cancelled.
The insurer had originally said it would apply the rebate over the period of March 2020 to the end of 2021.
Last October it extended that period to include all of 2022 and with a 20% uplift as it expected it would take longer for claims for deferred treatment that otherwise would have been made to arise.
However, it has now returned to its initial schedule, noting the current pressures on UK households.
“Ongoing analysis by Aviva now shows that the claims catch-up has been slower than expected and combined with the current pressures on UK household finances, Aviva has concluded that a payment earlier in 2022 delivers the best outcome for customers,” the insurer said.
“Payments will not be subject to the potential increase that was outlined in the October update as the payments are now being made within the original pledge timeframe, rather than being delayed until 2023.”
It noted that Grant Thornton has independently reviewed its approach in line with the commitment and that brokers and clients will be contacted over the coming weeks about the payments.
Other insurers have already issued rebates to their customers for missed, delayed, or lower claims levels as a result of the pandemic.
In 2020, WPA issued two rounds of rebate payments to customers of around £3.7m each.
This was followed by Bupa in March 2021 which announced a £125m payment to its UK health insurance customers. It has since included a further £71m in its latest annual results published in March.
The Exeter has also issued a £5.3m rebate to its health insurance members due to lower levels of claims being made in 2020 and 2021.
The rebate will see members receive an average return of £346 per policy, equivalent to two months’ premiums excluding insurance premium tax, the mutual said.