Nearly £175m was paid in life and terminal illness claims including 97.3% of term life insurance claims being paid.
Royal London paid out over £517m and 99.1% of all claims received were paid, claims statistics for 2017 showed.
Nearly £175m was paid in life and terminal illness claims including 97.3% of term life insurance claims being paid. There was an average of nearly £113,000 per claim and 92.3% of terminal illness claims were paid with an average payout of just over £129,000 per claim.
Over £128m was paid in whole of life claims;99.9% of claims were paid and the average payout was just over £4,000.
Craig Paterson, underwriting & claims philosophy manager at Royal London said:“Paying a claim is our moment of truth and in 2017 we paid out over £0.5bn.
“This is a record amount and shows that the changes we have introduced to our claims processes and product definitions are translating into being able to pay more claims. Our fast-track claims process meant we were able to pay 85% of claims within two days.
“When we need medical evidence the introduction of an e-AMRA has reduced the time taken to obtain a customer’s consent from an average of over three weeks to just 48 hours. These changes mean that people who claim can be paid without delay.”
Over £200m was paid in critical illness claims.Some 91.2% of claims were paid, 2% were declined due to misrepresentation and 6.8% did not meet the policy definition.The average payout was nearly £108,000.
Cancer was the top reason for a critical illness claim (61.8%), followed by heart attack (12.1%), stroke (5.8%), children’s critical illness (4%) and multiple sclerosis (3.6%). The average age of a critical illness claimant was 48.
Over £3.9m was paid in income protection claims including new claims and those already in payment.Furthermore 92.1% of claims were paid and of the 7.9% of claims declined, 5.5% were declined due to the policy definition not being met and 2.2% due to misrepresentation.
The top three reasons for IP claims were for musculoskeletal conditions (28), mental health conditions (19%) and cancer (12%).
Using the ABI method, the value of claims paid in 2017 was £620,000 and 72.9% of claims were paid.
There were36 claims declined that made up 27.1% of new claims received,18% were declined due to definition not being met and 9% were declined due to misrepresentation.
Last year income protection cover was extended to include fracture cover and hospitalisation benefit.Cover was extended to age 70 for a number of occupations; as people are living and working for longer this ensures the product meets the needs of today’s customer.
Over £700,000 was paid in free cover claims last year.Free cover is provided for up to 90 days while an application is being processed and will pay out in the event of a valid claim before any premiums have been paid. This can be crucial if a customer is waiting for a mortgage to complete.
Royal London introduced an electronic signature solution to speed up the payment of claims in November last year, reducing the time taken to make a decision and pay a critical illness claim.
Almost all are completed and returned within 48 hours,compared to an average of 18 days to return a paper hand-written declaration. Implementing this in claims means we can pay claims earlier, releasing crucial funds to our customers when they need them most.
