Zurich has paid out over £4.5m in protection claims related to COVID-19, the life office has revealed.
The figure is part of a package of numbers reported this week by Zurich which show it paid a total of £154.2m in life insurance claims during the first half of 2020.
However, the insurer said that it declined 14% of critical illness (CI) claims, with 7% declined for misrepresentation, where, for example, the customer had failed to disclose previous medical history or lifestyle factors.
The CI claims paid figure of 86% is below the market average of 91.6% (for both individual and group CI) reported in May this year by the Association of British Insurers.
However, a spokesman for Zurich said the insurer said it provided support to over 3,200 customers and their families with life, CI and income protection (IP) policies. The overall amount paid out to customers by the insurer is up by £14.2m compared to the same period last year.
Claims already paid for COVID-19 account for for around a third of the increase.
The Zurich spokesman said that “many more claims are still being processed” and the insurer expects to pay out over £10m more over the coming weeks.
ZURICH protection claims: H1 2020
For life insurance, more than 2,100 claims were received during H1, with settlements worth over £108m. This compares to 1,980 claims over the same period last year valued at £97.2m. Over 99% were paid with just 1% declined where customers had not shared important medical information when they applied for cover, such as a history of excessive alcohol consumption.
Critical illness cover
For CI cover, £42.4m was paid out to 561 customers, with amounts also up on last year when 570 customers received payments of £38.6m. However new claims in June are “noticeably lower” by around a third on the same period last year, which may be due to customers being unable to access medical advice and treatment.
CI payments include £575,000 awarded in claims for children where the main cause of claims was leukaemia. Over £150,000 was settled for customers with an “additional payments’ policy benefit”. This is triggered where customers are diagnosed with less severe illnesses covered by their policies.
The main causes of CI claims are still cancer accounting for 62%, heart attack (9%), stroke (4%) and multiple sclerosis (3%), with breast cancer alone accounting for nearly one in five (19%).
All new claims from customers with IP cover were paid, with around 367 claims in payment each month valued at £3.3m. This compares to £3.7m paid last out year when 85% of new claims were accepted.
The main causes of claims were musculoskeletal disorders for 29% of claimants, followed by mental illness (including anxiety, stress and depression) and cancers which both triggered more than one in five claims (21%).
Over £456,000 was paid out to customers with ‘multiple fracture cover’, another policy add-on for those with life, CI and IP policies.