British Friendly has reported a 52% year-on-year increase in the amount it paid out in income protection (IP) claims in 2020, equivalent to £5.6m paid to over 1,300 members.
The mutual revealed it paid 87% of all claims received in 2020. This compares with 94% of claims paid in 2019. Covid-related claims ranked second in the list of top reasons for a claim in 2020.
Since 2005, when British Friendly began recording its claims data, the mutual has paid an average of 95% of all IP claims – the only product it offers.
The top four reasons for claims in 2020 were musculoskeletal conditions (40.4%), Covid (13.6%), anxiety/depression (13.4%) and non-Covid related respiratory and infectious diseases (9.4%).
The average claimant age group was in their 40s with the gender split 64% male and 36% female. The average benefit paid out to members on pure income protection policies was £1,170 per month.
British Friendly’s claims breakdown only includes new decisions over 2020 and does not include ongoing claims from previous years. The insurer added that the 13% of declined claims were due to the policy definition not being met, non-disclosure or the policy exclusions.
Lewis Potter, head of claims for British Friendly, said: “While the last year has brought new challenges in all areas of life, our focus is ensuring we can continue to support our members for many years to come in both sickness and in health.
“We have seen a dip in claims paid statistics in 2020, as have many of our peers, but our long-standing commitment to supporting our members is demonstrated in the 95% of claims paid out over the last 15 years.
“The high number of musculoskeletal conditions confirms the continued need for income protection within the age-costed market and the higher proportion of Covid-19 and mental health claims demonstrate the far-reaching impact the pandemic is having on our members.
“At these times we are very proud of the additional support we can provide through our discretionary Mutual Benefits and BF Care programmes where members can access support such as physiotherapy, counselling and virtual GP consultations.”