March 2011

Mutuals leading the way in publishing claims statistics

For the customer, the only ‘moment of truth’ in any insurance contract that really matters is the point where they need to make a claim.  The customer will judge whether the policy does what it should do, and whether the provider acts fairly, almost entirely on that basis.

For a few years now mutuals providers of income protection have lead the way in publishing claims statistics.  The trade press coverage of releases from LV=, Cirencester friendly, Wiltshire and Dentists and General, to name but four AFM members, has been very positive.  We publish below one such press release.

Big insurers tend to shy away from publishing such data, suggesting that comparisons are difficult and misleading.  Comparison websites tend to focus on price, and too often fail to take account of after-sales service and whether the policy provided the cover the customer thought it did (remember the furore this time last year about the lack of cover for volcanic ash from cheap travel cover?).

Intermediaries by comparison have started to differentiate between policies based on the quality of the product and of claims handling.  This is a welcome move, and it is no coincidence that as a result there has been a trend of increasing market share for mutual insurers in the last few years.

We encourage the big insurers and bancassurers to return to the issue again, to increase transparency, and make it easier for consumers to purchase products that better match their needs.


99% of Income Protection claims paid out for third consecutive year

dg mutual, an Income Protection specialist for self-employed professionals, has paid out 99% of claims for the third year running, with over 50% of claims paid out within one week.

It is the third year the Mutual Society has settled 99% of Income Protection claims, which is one of the highest rates in the industry.

dg mutual believes the high rates are due to checking all applications thoroughly and conducting thorough medical checks at the outset.  Last year, over 50% of all Income Protection insurance claims were paid within one week and over 90% were turned around within two weeks.

As a Mutual Society, dg mutual was set up in 1927 to assist members during hardship.  Its CEO, David Thompson, says, “Our philosophy holds true today - we pride ourselves in settling claims quickly and without hassle for our members who tell us it really matters. 

There are many stories about Income Protection insurance payouts taking a long time to settle which is not what we want for our members.  We carry out all our medical checks at the outset which ultimately makes it a far simpler process and means there are no nasty surprises.”

Infection is still dg mutual’s highest cause of Income Protection Insurance claim including Swine flu and viral illnesses, proving it’s not just long-term conditions that keep self employed professionals off work. 

As a Mutual Society, profits are shared between dg mutual members – regardless of the number of claims.  In 2010, £195,000 of final bonuses were paid out to retiring members.

2010 claim facts

·                     On average, dg mutual’s members received an income for 12 working days

·                     The average age of claimants was 46

·                     On average 7% of members made a claim in the year.

About dg mutual

dg mutual has specialised solely in Income Protection since 1927 – originally designed to protect the incomes of dentists but now including most professional occupations.

dg mutual is authorised and regulated by the Financial Services Authority.

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