When Health Insurance began calling for more insurers to publish statistics revealing how many consumer claims they pay and decline, I’ll confess that I didn’t realise how much work would be involved.
Naively, perhaps, I assumed that insurers would know exactly how much they had paid out, to how many people and when.
Apparently, it is more complicated than that. I know that because we’ve been taking up a lot of time at life offices asking them for their claims figures (we are, of course, grateful for their assistance).
Producing claims statistics is a complicated and time-consuming business, especially so for income protection (IP) insurance. But, as we report in this month’s issue (page 21), insurers are now committed to finding a way of publishing them in a fair and transparent way.
And if one thing is to be learned from experience in the critical illness (CI) market, it’s that it is a job worth doing. As we also report this month (page 14), the fact that CI insurers are publishing their claims statistics – and now, thanks to Health Insurance, details of proportionate payouts too – means they are much better placed to demonstrate the outstanding work that they have done to address non-disclosure.
So that just leaves those pesky IP stats. Some insurers already publish them, but there is controversy around methodology and reliability. After all, how can you check an insurer’s statistics independently? Then, of course, there is the temptation to generate league tables, which, as Peter Barrett from reinsurer RGA points out, is unfair to younger insurers (page 14). Worse still, it can also impact the sales process unduly.
But the genie is out of the bottle and those statistics will have to be declared. Perhaps, then, it is the way they are publicised that is key.
It is worth repeating here the concept mentioned by Calvin Cole, head of underwriting & claims at RGA, in a Health Insurance Silver Briefing towards the end of last year.
In Ireland, Cole said, insurers aggregate claims statistics and publish industry-wide data region by region. It goes down a treat with consumer journalists as they know that readers love comparing the different parts of their country. Who, for example, doesn’t enjoy the survey – rolled out annually in the UK it seems – that shows that males born in Kensington will live 13 years longer than those born in Glasgow (apart, maybe, those of us from Glasgow). It’s the type of thing that generates column inch after column inch in the national press.
It’s a great idea, but let’s hope that IP insurers come up with a more competitive methodology. Insurers that pay more valid claims and have lower non-disclosure ratios should get the credit they deserve.
Whatever happens, it’s clear that it’s a long, arduous process towards transparency. The good news is that the health insurance and protection industry seems, at last, to be getting there.