- Pay-outs for 99% of motor, 87% of travel and 79% of home insurance claims.
- Industry working to raise consumer awareness to reduce scope for declined home and travel claims.
Figures published for the first time today by the ABI show pay-out rates for the most common insurance claims made during 2013 and 2014. The figures follow an analysis of claims made under motor, home and travel insurance.
The analysis was carried out to help identify where customers may need more help to understand what they are covered for, and reduce the level of declined claims. It is part of the ABI’s programme to improve customer trust and increase transparency announced by ABI Chairman Paul Evans at the ABI Biennial Conference last November.
Part of this includes the recent publication of the Renewal Code for Vulnerable Customers, to help participating insurers and brokers identify and help those customers who may need extra guidance to get the best deal at the renewal of their motor and home insurance policies.
The analysis covered 6.9 million claims handled by 19 insurers, split 4.3 million motor, 1.8 million home, and 800,000 travel.
Key findings showed:
- For motor, 99% of claims were successful, with an average pay-out of £2,160.
- Under home insurance, nearly four in five (79%) of policyholders who claimed received a pay-out. The average pay-out was £2,520, compared to the current average combined buildings and contents premium annual premium of £290. The main reasons for a claim failing were: wear and tear or damage caused by a lack of maintenance which are not insurable, the claim value being below the policy excess, and not having bought the right cover, such as accidental damage, which is often an added extra.
- Nearly nine in ten (87%) of customers claiming on their travel insurance received a pay-out – on average £884. Declined claims were mainly due to: cancellation falling outside of the scope of cover, failure to declare a pre-existing medical condition that led to a claim, no substantiation for the loss of items, and the claim being below the policy excess.
Huw Evans, ABI’s Director General, said:
"As insurers, we want our customers to have greater trust in us to pay claims when life gets difficult. We cannot earn that trust without being more transparent about how many claims are paid and why a minority of claims are usually declined. That is why the figures we are publishing today are so important.
"Contrary to popular belief, insurers want to pay honest claims. It helps nobody when customers have bought the wrong product or have not disclosed important information. So we will use the analysis we are publishing today to drive awareness campaigns to improve even further the acceptance rates for home and travel. Buying insurance should never just be about getting the cheapest price in the quickest time possible, it should be about ensuring you have the right product for your hour of need."
Below is a breakdown of the claims data:
- Average claim paid: £2,160
- % of claims paid: 99%
- Claim pay-out rate per year (% of all motor customers who had a claim paid): 10%
- Average claim paid: £2,520
- % of claims paid: 79%
- Claim pay-out rate per year: 4%
- Average claim paid: £884
- % of claims paid: 87%
- Claim pay-out rate per year: 2%