Zurich paid UK claims totalling almost £2bn in 2016

Zurich announces that it has paid out almost £2bn in UK claims payments during the course of 2016

Over 99% of all general insurance claims were paid, with 130 claims of more than £1m being made. Typically, the proportion of consumer home claims paid out is lower at 94% – but this is improved on the level from 2015 and well above the industry average*.

Zurich paid out 95% of all Life claims in 2015. Where a minority of claims were not paid, reasons include non-disclosure of medical information on applications and where an income protection customer may have returned to work before the policy’s payment period started.

Key highlights of Zurich’s £2bn UK claims paid in 2016:

General Insurance products

  • Received over 220,000 new claims in total, down from 260,000 in 2015
  • Just over half were motor claims, with the rest split between casualty and property
  • 94% of consumer home claims were paid. Where claims weren’t paid, the main reasons we related to customers misunderstanding what they could claim for. Wear and tear, and not having the right cover account for around 80% of these reasons (see below for more details)
  • Paid 99% of consumer motor claims
  • Paid over 99% of claims from commercial customers
  • 130 individual payments of over£1 million

Life products

  • Almost 4,000 new Protection claims made in 2016
  • 90% of critical illness, 85% income protection, and 98% life retail claims paid across 2016
  • Nearly one in five (19%) critical illness claims for breast cancer, nearly a quarter (24%) of income protection claims for mental illness
  • £1.9 million paid for children’s critical illness claims
  • Nearly a quarter (24%) of income protection claims were for mental illness including anxiety, stress and depression.  This was followed at 17% by cancer, and musculoskeletal disorders, and back problems at 10%

Commenting on these figures, Zurich’s UK CEO Tulsi Naidu said:

“Releasing this information helps break the belief that insurers try and shirk their responsibilities. We are proud of our claims record, and paying out £2bn in one year is a significant amount. It also firmly underlines the huge role we play in getting people and businesses back on their feet.”

“That such a small number of claims are declined shows the level to which customers understand what their policy covers – something we are keen to improve even further.”

Why are fewer home claims paid?

Whereas almost all consumer motor claims are paid, this is not the case for retail home property claims. Of those claims turned down, the overwhelming reason is because customers make claims for damage caused by wear and tear, which is not why insurance exists. The second most common reason is where customers make a claim, but do not have the appropriate cover in place.

Examples of this could be making a claim for an accident, but not having taken out a provision for accidental damage, or claiming for damage in the garden where this isn’t part of the policy cover. Wear and tear, and not having the right cover account for around 80% of declined property claims. There is more for the industry to do as a whole in terms of helping people understand what their insurance covers – and Zurich will do its part to tackle misunderstanding.

*Industry average claims statistics from the ABI for 2014 and 2015 showed that just 84% of home insurance claims were paid on average. More information can be found here.