The chairman of the Protection Distributor’s Group (PDG) has told Health & Protection delays in insurer claims turnaround times are unfair to claimants.
His comments come in the wake of a halving of the number of insurers making the cut for its latest claims charter when compared with the previous year.
PDG chairman Neil McCarthy (pictured) challenged the industry to train more claims assessors and argued more work should have been done sooner, but added he would be “very happy” to readmit insurers to charter status once they can demonstrate three months of continuous service.
Insurers cut from this year’s list have told Health & Protection they are taking action to improve customers’ claims experience and are engaging with and challenging the PDG.
They also highlighted that issues such as obtaining medical evidence were not always within their control but could affect the claims process.
Fourteen cut to seven
At the start of the month, the PDG released its list of Claims Charter signatories for 2024.
Seven insurers made the cut including Aegon, AIG, Guardian, Holloway Friendly, HSBC Life, Royal London and Shepherds Friendly. This was half the number of the 2023 list.
Last year’s line up included AIG, British Friendly, Guardian, Holloway Friendly, HSBC Life, Legal & General, LV=, MetLife, Royal London, Scottish Widows, Shepherds Friendly, The Exeter, Vitality and Zurich.
Delays in claims turnaround
When pressed on feedback the PDG received from advisers and intermediaries on provider claims processes and outcomes, McCarthy told Health & Protection PDG members as well as other advisers had shared concerns about time taken to assess claims since the onset of the pandemic.
“Let me be clear, the PDG are not saying insurers are not paying claims,” McCarthy said.
“Our industry does a fantastic job of supporting people in times of real need through paying claims, and insurers provide additional support services to help customers practically as well as financially at the point of claim.
“Insurers across the industry have countless claims case studies showing the positive difference protection policies can make when tragedy strikes.
“What is unfair to the claimant, we suggest, are delays caused in turnaround times that are absolutely in the control of insurers.
“These delays in paying claims can cause real financial hardship which is why we feel things need to improve.”
Insurers should have been aware
At Heath & Protection’s first Protection Forum last month The Exeter’s CEO Isobel Langton spoke about increased competition for claims assessors and that publishing claims charters was ‘not helpful.’
When asked how confident he was things were moving in the right direction following these comments, McCarthy maintained the PDG’s claims charter sets minimum standards.
“The focus for us is on consumer outcomes only,” McCarthy continued.
“The fact that an insurance leader is identifying a war for talent, identifies gaps in the skill set that insurers clearly need.
“If your products are designed to pay claims, it naturally follows that you need a fully trained and skilled team to facilitate this.
“Insurers would have been aware of their expected claims likelihood and should have ensured they were training and recruiting accordingly.
“We fully appreciate the skills needed to be claims assessors – the work they do is incredibly important and our members share many examples of where dedicated claims assessors have gone above and beyond to support claimants.”
Train more claims assessors
But McCarthy said it was also clear the protection industry needs to train more claims assessors and “arguably” should have been doing so earlier.
“The winners in this area will be insurers who can recruit, train, and retain claims assessors while looking for new technological solutions to assist in this process,” he added.
“Nobody in the industry wants to provide a ‘poor’ claims service – insurers on the whole do an incredible job paying claims.
“I believe that by raising these issues we will see an improvement in the way claimants are dealt with, and I hope in 12 months we will see most insurers achieving charter status.
“We have had positive discussions with a number of insurers regarding how they are speeding up the claims assessments, as well as other initiatives to improve the claims experience and we will be very happy to add insurers to charter status once they can demonstrate three months of continuous service.”
Insurer response
Health & Protection contacted the eight insurers including British Friendly, Legal & General, LV=, MetLife, Scottish Widows, The Exeter, Vitality and Zurich which were removed as charter signatories this year for their response to McCarthy’s comments.
British Friendly said: “British Friendly has recently recruited two experienced claims assessors and has introduced tele-claims as the primary route to support claiming members.
“These improvements have resulted in significant reductions in time taken to assess a claim and we are confident that our new approach will mean that we can meet the charter requirements when it is next reviewed by the PDG.”
Claire Hird, customer service director at The Exeter, said: “Our focus is on delivering the best outcome for our members – paying a claim.
“When it comes to delivering peace of mind for our members, our 2023 figures, which we have recently released, speak for themselves.
“We have challenged the importance of some of the criteria used in the claims charter and have engaged with the PDG around what matters most to insurance customers at the point of claim.
“We work hard to ensure we admit as many claims as possible, and that sometimes takes longer than simply declining.”
Legal & General said: “We remain committed to improving the claims experience and delivering the best outcomes for our customers and their families.
“This year we have taken huge strides in enhancing our systems – and investing in the capabilities of our people – to streamline processes and alleviate wait times. Significant improvements like these require time to take effect.”
A spokesperson from LV= said: “We fully recognise the importance of the claims charter and we’re disappointed to have not met the new criteria set by the PDG.
“As highlighted in our recent claims report, we pay out 94% of all protection claims, however, improving our turnaround times remains a key area of focus for us.
“We’re making significant investments to improve our claims capability and continue to provide the best service possible to our advisers, members and customers.”
Dominic Grinstead, CEO of MetLife UK, said: “We put fast claims payments at the forefront of delivering good customer outcomes.
“In 2023 alone we paid 24,000 claims; assessing and paying the vast majority within a few days.
“However, not all claims are straightforward to process, and timescales per case may flex depending on the individual complexity and quality of the information received.
“We share the PDG’s desire to improve customer outcomes and look forward to working with them in the future.”
Justin Taurog, managing director of VitalityLife, said: “Last year, in a small number of complex cases, the assessment of medical evidence took longer than we would have liked and exceeded the five days set out by the PDG.
“We met all other areas set out within the charter.
“Paying claims quickly and efficiently and making the process as simple as possible for both claimants and their advisers is very important to us.
“We are committed to further speeding up the reviewing and processing of medical evidence as part of our continued investment in claim management, which includes further investment in technology to support the whole claims process.”
Zurich told Health & Protection: “We understand the criticality of the claims process, and we recognise the positive challenge that the PDG presents.
“We have signed up for the charter from the outset and expect to do so again, and while we can’t attest to meeting every aspect the PDG understandably seeks right now, we are working hard to meet each element.
“Many aspects of the claims process are directly within the control of insurers and we need to ensure robust and reliable service delivery here.
“Some aspects – most obviously availability of medical evidence – are less easily controlled, but we need to continue to work with the medical profession on improving access, and here we’ve seen good alignment and collaboration between the PDG and insurers.”