Aegon calls on the protection industry to better highlight claims statistics
Hidden claims statistics are denting customer confidence27 April 2015
- 77% of consumers were unaware that claims statistics to illustrate pay out rates were published
- Only 32% of consumers said claim rates had been discussed with them by their adviser
Research from Aegon UK* has revealed a low awareness of industry claims statistics and is calling on the protection industry to boost consumer trust and confidence by better promoting claims statistics. Findings showed 77% of consumers weren’t aware of the current strong rate of pay outs for protection policies. It was also revealed that only a third (32%) of people had discussed industry claims statistics prior to taking out cover.
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.
Aegon is proud to be a partner of the 7 Families initiative
In 2014 Aegon became a partner of the 7 Families initiative to promote the benefits of income protection cover.
One family to see the value of protection is the Snell family. Until last summer Graeme Snell was a fit and healthy Hartlepool United fan. He worked full time as and Advanced Health and Wellbeing Practitioner and described himself as being very fit.
Find the full story here: https://www.youtube.com/watch?v=RdcxdCnJZ7g(Opens new window)
For more information, please visit www.7families.co.uk(Opens new window)
*Aegon consumer survey, March 2015, sample of 526 consumers