Aegon records 17% rise in life claims during 2020

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Claims data from Aegon shows the insurer paid out on 96% of all life claims in 2020 to 807 families and businesses, representing payments amounting to £81.3 million.

Aegon recorded a 17% increase in the volume of life protection claims received during the year compared to 2019. 

Cancer was again the most common cause of death for a life claim (40%), followed by heart-related conditions (21%) and respiratory-related deaths (14%). However, while the proportion of claims for cancer and heart-related deaths remained in line with those recorded in 2019, the proportion of respiratory-related deaths doubled from 7% in 2019.

The average size of claim paid was £100,751 and the average age at claim was 63 years old.

Of the life claims Aegon was unable to pay in 2020 all 4% were due to misrepresentation. Of the claims not paid due to misrepresentation, alcohol accounted for 31% of the claims. The remaining 69% were due to non-disclosure of respiratory issues, cardiac issues, cancer, diabetes or smoking.

Simon Jacobs, underwriting and claims director at Aegon, noted that while the Covid-19 virus contributed to some of the increase in life claims, the pandemic did not account entirely for the 17% year-on-year increase.

"Of the life protection claims we received, coronavirus was shown on 12% of death certificates as the cause of death. However, it's possible that it could have been a contributing factor in a larger number of claims, even though it wasn't mentioned on the death certificate," said Jacobs.

"A number of the coronavirus claims Aegon received were for individuals with underlying health conditions such as cancer, diabetes and respiratory conditions - some of these, regardless of the pandemic, may have resulted in a claim."

Terminal illness

Aegon separately assessed its terminal illness (TI) claims - paid out on a diagnosis where life expectancy is 12 months or less - and 21% of its life claims were paid early under its TI definition.

The insurer paid 93% of all terminal illness claims it received - a total of £23.3m to over 205 individuals and their families - in 2029.

Critical illness

Claims for critical illness fell 14% compared to 2019, with Aegon paying out £34.4m throughout 2020, representing 93% of claims. Cancer (62%) continued to be the most common reason to claim, followed by heart attacks (12%) and stroke (6%).

The insurer stated that critical illness claims denied were due to the definition not being met (3.5%) and misrepresentation (3.1%).

Jacobs said that although the increase in life claims during a global pandemic is to be expected, the fall in critical illness is"worrying".

"The impact of multiple lockdowns and the effect of people being mindful of burdening the NHS, is, we believe, the reason behind the drop in the volume of CI claims and it's worrying. A delayed GP visit or a missed screening is going to have a negative impact on early detection and diagnosis of medical conditions, especially cancer," Jacobs said.

Income protection

Aegon's income protection claims figures shows 91% of new claims received were paid in 2020, with £1.4m paid in regular monthly benefits. Volumes of income protection claims were low and the three-year average shows Aegon paid 93% of claims.

Cancer was the most common reason for income protection claims (32%) in 2020, closely followed by mental health (22%).

Jacobs said the insurer expected to see an increase in income protection claim volumes during the year, but Aegon received only two claims related to Coronavirus.

"One reason could be the government's extension of the furlough scheme potentially delaying claims. As this comes to an end later this year and we move to a new normal, we expect to see an increase in income protection claims," he said.

"One positive impact of the lockdowns is that accidents and workplace injuries are likely to have reduced. Again, claims of this nature may increase as people return to workplaces and regular travel."

Aegon has also published a ten-year history of claims paid for each of the protection products. See full 10-year history of claims here.

 

This article was written by John Brazier from Cover Magazine and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com