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Scott Cadger


Written by Scott Cadger, Head of Claims and Underwriting Strategy, Scottish Widows.


What is there to be said about claims statistics that hasn’t been said across the market a hundred times before? What new insight will be gathered, can we tell the story better, and how detailed do we go with the numbers, facts and figures.

Protection insurance is a promise we make to our customers to protect them and their loved ones if the worst should happen, and paying claims is what being an insurer is all about. It’s very different to asset accumulation and dream making. But it is the core principle behind every insurance company that has existed, is currently trading and yet to be created.

Insurance requires a downside risk, which translates into something you don’t want to, or have never expected to happen to you or a loss that would impact you or your family. It’s not at the top of the list of the most desirable products, but when it works well, the positive effect it can have at some of the worst times is immeasurable.

Moving on from the numbers

This is why, while it’s important for transparency that we publish our annual claims statistics, we need to move on from obsessing around the latest decimal point improvement and start telling the story better. Let’s be blunt, nobody really cares from one firm to another. In fact, recently an IFA shared with me that they place a lot of business with one firm that doesn’t have the best record, but this doesn’t stop advisers recommending them.

Why is this? For that particular firm, it is part of the evolution of their insured book. Their book is younger than a lot of providers with the consequence that they have a higher than average decline rate for misrepresentation. And if a customer hasn’t given all the information at point of purchase, there is a higher likelihood that those conditions may result in an earlier claim. Equally, for a provider with a maturing book, the opposite happens. Does that make them a better insurer?

In short, no, and advisers know that.

I’m not convinced that talking up our claims paid numbers really helps demonstrate the impact protection has had for those that need to use it, or the safety net it provides for those who haven’t.

Firstly, we are telling ourselves, an industry that speaks to itself, that stands up at conferences and talks about the great strides we made in improving our claims record. Does this work? Our own research with customers, the ultimate users of our products, suggests that the message isn’t right, with people still believing insurers only pay 34%* of all claims.

Secondly, who understands these numbers? As routes to engage with customers improve all the time, when does a claim start, what counts as a declined claim, what did the customer expect? For every customer this will differ, so trying to count this across an industry is incredibly challenging. If as an industry we ourselves question the usefulness of the numbers, how can we expect customers to engage with them?

Engaging with a wider audience

How do we change that perception and engage with a much wider audience than ever before?

Positive stories in the mainstream media really show how an insurer’s product makes a difference. For example, in 2017 an AIG children’s critical illness claim made a huge difference to a couple and their child, with a payment funding implants that allowed their child to hear for the first time, just before his first birthday.

We have a moving story from one of our own claimants. A 27 year old new mother recently diagnosed with multiple sclerosis received a critical illness pay-out that has made such a difference to her life. It has allowed her to take time off work for treatment, and to set money aside in case additional support is needed in the future. We’ve made a very difficult time for that young family much easier.

We’ve thousands of these cases every year, 9,499 in 2018** to be exact, that all have their own story. Every case is fundamentally life changing. Not every customer is comfortable being public about their condition and associated impacts, but within claims teams right across the country, everyone is striving to provide that moment where we surpass expectations.

Just recently, I’ve been told an amazing story.

We had a new protection application submitted for underwriting. As part of our standard assessment, we check to see if any existing policies are in a place. That check threw up that not only was existing cover in place, but the condition being underwritten would be covered by that original policy. The underwriter quickly passed the case over to the claims team, and rather than an extension of cover, the claim was paid, mortgage paid off and one more customer’s life changed.

We’re making a difference every day

And this is just the start of the engagement. We pride ourselves on our wider core proposition, facilitating the right experts to support customers throughout their time as policyholders. From the fantastic offering from Christine Husbands and Red Arc in supporting customers emotionally and practically, to the Macmillan financial guidance support team.

A recent cancer claimant, referred to Macmillan by their claims assessor was taken through a financial fact find, received a benefit check and applied for a Macmillan grant towards the cost of travelling to their medical appointments. This resulted in an increase of over £4000 annually and a lump sum of £400.

These are the stories that make us proud of being part of the protection insurance industry. The unsung heroes across claims teams that strive each day to give customers the very best service and the partnering with experts to give full support at such a difficult time.

We should be especially proud, not only of the claims we’ve paid but the difference we make to the lives of our customers every day. That’s what’s important, not just the numbers and paid rates.

So we need to lift our heads up, push those shoulders back and take that pride out to everyone that we engage with. We offer more than realising dreams; we provide security to families so they can achieve those dreams.

* Scottish Widows Protection Research 2018

** Scottish Widows Claims Statistics 2018


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