May 28, 2019

How many claims did Mutuals pay compared to shareholder-owned Insurers in 2018?

Mutuals paid out on more than 94 per cent of income protection (IP) claims in 2018, according to trade body the Association of Financial Mutuals. (AFM)

Amount of claims paid

Research by the AFM into nine of its members who offer IP policies showed that combined, they paid out more than £26m in claims. An 18 per cent increase compared to 2017.

The number of claims paid

The number of claims paid by the following members:

  • British Friendly
  • Cirencester Friendly
  • Dentists’ Provident
  • DG Mutual
  • The Exeter
  • Holloway Friendly
  • PG Mutual
  • Shepherds Friendly
  • Wiltshire Friendly

also increased by 15 per cent to 5,721.

These claims represented 94.4 per cent of claims received. Compared to the 88.1 per cent of claims paid by all providers in 2018, according to the Association of British Insurers.

Claim facts

According to the AFM, the average claim in 2018 ran for 16 weeks and surgical claims made up the highest value at £6,605.

The greatest number of claims received were for musculoskeletal problems, 22 per cent. Followed by accident or injury at 19 per cent.

Financial support

Martin Shaw, chief executive of AFM, said:

“The results provide further evidence that all IP 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.”

“A claim is the key indicator of the value of any insurance policy, and by consistently paying more claims than the industry as a whole; the mutual sector is demonstrating loyalty to its customers and providing a business model that works for them.”

Stuart Tragheim, chief executive at Holloway Friendly, said:

The mutual’s purpose as a business was to look after its members when they needed to claim on their policy.

He said: “We are really proud of the support we provide to members when they claim and our claims record. 

“We look to pay every claim wherever we can and treat every single claim on its merits and provide a range of rehabilitation support to get our members back to work so they can get their lives back on track.”

Source: FT Adviser May 2019

The insurance industry paid out more than £5.3bn in protection claims in 2018. Source: Association of British Insurers and Group Risk Development,

If you are interested in arranging protection insurance it really can pay to take expert advice.

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