Research by the Association of Financial Mutuals (AFM) into nine members that offer income protection products shows that they paid out over £26 million in claims to 5,721 policyholders in 2018.
This represented a 15% increase in the number of claims paid and an 18% uplift in the value of claims paid, reflecting the greater demand for the services provided by AFM members. The results mean 94.4% of claims received were paid in 2018, compared to the 88.1% of claims paid by all providers according to the Association of British Insurers.
Further key findings from the research include:
- The average claim in 2018 ran for 16 weeks.
- The greatest number of claims received were for musculoskeletal problems (22%), followed by accident / injury (19%).
- Surgical claims were the highest value at £6,605, and
- Mental illness claims, which have been growing rapidly and typically run for a long time, were the second highest value at £5,234, and now account for 8% of all claims.
Martin Shaw, chief executive of AFM, said: "The results provide further evidence that all income protection providers are in the business of paying claims whenever they can. Customers, confident that their claim will be handled fairly, are increasingly aware of the importance of protecting their family's income and future by taking out income protection. And 2018 sales figures indicate that they are turning more than ever to a mutual provider.
Stuart Tragheim, CEO at Holloway Friendly, added: "We believe that more people are starting to see the importance of having income protection and we have definitely seen a big uptake in business as intermediaries and members understand the added value that friendly societies can bring. The claims results we are seeing from AFM members are truly fantastic and clearly demonstrate that friendly societies really do focus on the needs of their members."
Thursday 10 October, The Brewery, London
50th anniversary of moon landing
‘Talk to 10,000’
Period of consultation