The protection insurance sector needs to up its game in addressing misrepresentation so more claims are paid.
This is according to Phil Deacon, who led the Income Protection Task Force’s (IPTF) ‘7 Claims Stories’ series, the third of which tackles misrepresentation.
Making a difference
Speaking at an event organised by the IPTF to celebrate its 20th birthday last week, Deacon challenged delegates to “make a difference”.
“Based on the data that I have available, roughly 5% to 10% claims get declined,” Deacon explained.
“Just over half of those get declined due to misrepresentation.
“Claims paid stats are often used as a measure of an insurer’s performance or a claims team’s performance in paying claims.”
The die has already been cast
Deacon added that during his career as a claims assessor when a claim hit his desk that had misrepresentation, there was very little he could do about it.
“The die has already been cast,” he continued.
“The only way I can influence it is by categorising it in line with the ABI Code under innocent, careless or deliberate.
“So claims paid stats are as much a reflection on the distributor’s role in the value chain as it is the insurer’s.
“And when you consider that the majority of misrepresentation is careless, then it stands to reason that actually, people need to take a little bit more care and advisers should focus a little bit more on processes in terms of getting better disclosure.”
Challenge to insurers
But Deacon also challenged insurers to focus on the new business journeys, making sure customers check their answers – not relying on customer apathy.
“I know there are people in this room who can make that change happen and we can pay more claims,” Deacon continued.
“It just requires a bit more focus. It needs us to look at our processes – both insurers and advice firms.
“So that’s my challenge to you. Have a read of this story.
“If you think I’m wrong, tell me, but I don’t believe I am.
“And it would be wonderful if we can start nudging up those claims paid stats.”