Insurers Need to Become More Transparent About Claims Payout Details
Jan 26, 2016
The chance of pay-out for insurance motor claims is 99%, states the Association of British Insurers (ABI). Figures published for the first time by the ABI show pay-out rates for the most common insurance claims during 2013 and 2014 at 19 insurance companies. The figures follow an analysis of claims made under motor, but also home (79%) and travel (87%) insurance which show lower pay-out percentages.
Transparency and trust go hand in hand
Huw Evans (Director General, ABI) said: ‘’We cannot earn trust without being more transparent about how many claims are paid and why a minority of claims are usually declined’’. The move is part of a push to improve the industry’s image, which many people inside and outside insurance see as a weak spot. It is included in ABI’s program to improve customer trust and increase transparency. ‘’More transparency from insurers would be a positive development. However, such figures will also raise questions about the calculation. For example, how is glass damage for car insurances included in this picture?’’, says Jeroen Morrenhof (CEO, FRISS). Research results from aggregator B.heard shows that 19% of the insured is very satisfied with the customer service of their insurance company. Moreover, a low sense of trust leads to the perception that insurance fraud is ‘slightly acceptable’. The insurance company AXA has already started with publishing the overall percentage of claims made that are paid. AXA believes that increased transparency is crucial to lifting consumer trust, and addressing the concern, held by some, that insurers seek to avoid claims.
Decrease insurance fraud
Morrenhof continues: ‘’In order to decrease insurance fraud, it’s important to not only exclude the abusers and fraudsters but to also stimulate honesty and integrity amongst the insured. Transparency from the insurer and the likelihood of claim pay-out will contribute to positive behavior of customers, it’s a two way street’’. Sources: AM, Association of British Insurers (ABI)