AFM Claims Forum Martin Shaw, AFM 2018 Claims data collection: - - PowerPoint PPT Presentation

AFM Claims Forum

Sector Claims Data Martin Shaw, AFM

Sector Claims Data

2018 Claims data collection: Income Protection

• All nine AFM Holloway/ Income Protection

providers

• Repeating 2018 exercise

PMI/ Health Cash Plan

• New exercise
• Data from 12 healthcare providers

Life/ GI

• No data exercise, but some general slides

provided

Income Protection Claims

Claims received in 2018: 6,061 Money paid in claims: £26 million Average value of claims: £4,539

Abdominal 3% Accident/ Injury 19% Cancer 4% Chest/ lung/ nose/ throat 11% Heart/ Circulatory 3% Hip/knee 2% Musculoskeletal 21% Mental illness 8% Neurological 2% Surgery (not covered in other categories) 4% Other 23%

WHAT PEOPLE CLAIM FOR

Average claim (largest values)

• Surgery

£6,605

• Mental illness

£5,234

• Cancer

£4,810

• Heart/ circulatory

£3,414

Income Protection Claims

2502 3378 3485 4141 4233 4753 5600 5808 5865

Variation in claims values by company

average £4,539

4 5.5 11.3 15.4 16 18.1 20 26 29

Average duration of claims (weeks)

Average 16.2 weeks

Income Protection Claims

The average claim lasts nearly four months. There are significant variances between

• rganisations-

product design may be part of the reason, makes a big difference to profitability.

Income Protection Claims

AFM members received over 6,000 new claims in 2018, and accepted 94.4%, paying £26M in claims. This represents a further increase on 2017 and is almost 10% more than the industry average. The median level of claims paid was even higher, at 95.8%.

94.40% 93.70% 87.20% AFM 2018 AFM 2017 ABI 2017

PROPORTION OF CLAIMS PAID

paid rejected

Income Protection Claims

Of 340 claims rejected:

38% were for non-disclosure at application or during claims 29% for other policy criteria not met 27% for excluded conditions 6% for does not meet definition of disability

5.60% 6.30% 12.80%

AFM 2018 AFM 2017 ABI 2017

PROPORTION OF CLAIMS PAID

paid rejected

Income Protection Claims

Of 340 claims rejected:

38% were for non-disclosure at application or during claims 29% for other policy criteria not met 27% for excluded conditions 6% for does not meet definition of disability

8.2% 3.1% 3.1% 0.2% 4.2% 4.0% 6.1% 12.5% 3.6% 5.7% 2.8% A B D O M I N A L A C C I D E N T / I N J U R Y C A N C E R C H E S T / L U N G / N O S E / T H R O A T H E A R T / C I R C U L A T O R Y H I P / K N E E M U S C U L O S K E L E T A L M E N T A L I L L N E S S N E U R O L O G I C A L S U R G E R Y ( O T H E R ) O T H E R

Proportion of claims not paid

Average 5.6%

Healthcare Claims

Summary for PMI and cash plans in 2018:

Premiums rose 4% Claims value rose 9% average value of £126.19 Claims numbers up 4% rate of 89 claims per 100 policies Claims accepted 96.8% 97.2% claims paid within 5 days

(based on 4 PMI and 10 cash plan responses)

PMI v Cash Plan

PMI Cash Plan 18% rise in claims v 2017 3% 12 claims per 100 policies 148 £1,380 average value/ claim £51 1% claims rejected 3.2%

PMI v Cash Plan

PMI Cash Plan £196 Average Premium £110 £1,131 Median Premium £124 £163 Paid out per policy £76 83% Claims/ Premiums 68%

Health Cash Plans

What are the Top 5 reasons for a claim?

88% for chiropody/physiotherapy/dental/optical

(1.75 million claims in sample; 6 providers)

Chiropody/ Physio 32% Complement ary therapies 5% Dental 36% Health and Well-being 3% In-patient 1% Optical 20% Prescriptions 3%

WHAT PEOPLE CLAIM FOR

Health Cash Plans

Fairly consistent structure of products, but higher claims experience not always matched by premium size

0.0 0.5 1.0 1.5 2.0 2.5 50 100 150 200

Cash plan providers

ave prem ave claim claims/policy

Private Medical Insurance

No two PMI policies are similar

(average premium: £148; median: £1,131) (average claim: £126; median £2,237)

0% 10% 20% 30% 40% 50% 60% 70% 1000 2000 3000 4000 5000 6000 7000

PMI policy variances

ave prem ave claim claims/ policy

General Insurance Claims

FCA already publishes claims data for some products, including home, and Fairer Finance rates some GI firms

Life Insurance Claims

ABI stats for 2017: 98% of Life product claims paid 99.99% of Whole of Life No data on with-profits maturities: Last data AFM obtained showed mutuals 17% better returns (2014)

Sector Claims Data

The results paint a positive picture about the intent of the sector to pay claims. Income Protection

• AFM to produce press release
• Data shared with ABI

PMI/ Health Cash Plan

• Not for external release, though

results will aid our lobbying work