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Income Protection – change to methodology

The ABI has decided to change how it measures the percentage of claims paid for Individual Income Protection products, so that this now reflects only new claims received during the year that were paid and declined. As stated in previous releases, the previous measure also took into account all claims in payment, and decisions made regarding these claims.

There are many ways in which the figure can be legitimately calculated. The ABI believes that the new claims measure is more meaningful for consumers in terms of helping them to gauge the claims performance of different products. 

The table below shows how both measures for Individual Income Protection compare for 2015 and 2016. The ABI currently does not collect the total value of new claims only for Individual Income Protection, and therefore cannot calculate the average new claim value.

Product

Number of claims paid

Percentage of claims paid

Claims declined as % of total number of claims received

Total Value of Paid (£000)

Average claim paid

2016 Individual Income Protection (old method)

13,524

90.3%

9.7%

140,698

10,404

2016 Individual Income Protection (new method)

5,094

84.8%

15.2%

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2015 Individual Income Protection (old method)

11,732

91.2%

8.8%

114,958

9,799

2015 Individual Income Protection (new method)

3,785

88.2%

11.8%

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