Challenging Misconception That Insurers Don’t Pay Out

LONDON, England, July 13 -- Aviva, a provider of insurance, savings and investment products, issued the following news release:

Aviva is urging UK insurers to help debunk the myth that insurance does not pay and to do more to explain how insurance claims work.

Consumers believe insurers try to avoid paying claims

Common misconceptions that insurance does not pay should be challenged says Aviva, which has published its first UK-wide claims report covering aspects of its individual and commercial insurance business.

The consumer research commissioned by Aviva shows that 55% of consumers believe insurers will always try to avoid paying claims if they can with the average payment considered to be just 52% of all claims.1

The report shows that in 2017 Aviva accepted 96% of insurance claims made by individual and business customers in the UK, paying out more than pound sterling3.6 billion in cash settlements and services - equivalent to more than pound sterling10 million every single day, or pound sterling7, 000 every minute.2

The reality is that every year about 120, 000 vehicles are repaired through Aviva car insurance - almost enough to fill every lane on the M25 motorway - and enough carpet is replaced through home insurance claims to cover 11 football pitches.

Nearly one million Aviva customer claims (961, 973 or 96% of claims made) were accepted last year across motor , home, travel, protection, health and commercial business insurance.

Aviva's report also explains the common reasons why 4% of all the claims it received could not be paid, and includes helpful case studies from customers as well as frontline employees, illustrating how its claims approach is about more than just providing financial support.

The impact that the insurer's investment in digital tools is having on making the claims process simpler and faster is also evidenced.

25 percent Aviva UK claims reported digitally by end of 2017

The UK's largest insurer says there is more that the market as a whole can do to simplify and improve customers' experience of making an insurance claim, particularly when they often do so at the most challenging times in their lives.

At the same time, consumers must take more responsibility for their insurance, such as:

* being clear on their policy terms before they purchase, and

* working closely with their insurer to provide full information about their circumstances, as needed.

Andy Briggs, Chief Executive Officer, Aviva UK Insurance, said:

"Misconceptions that insurance does not pay out when it is needed or that it is unnecessary are leaving UK families and businesses potentially exposed through a lack of suitable insurance. If people have a sense that insurance is not going to pay out, they won't bother buying it.

"We are calling on the industry to join us in comprehensively publishing information about how insurers manage customer claims, why some claims are declined and how consumers can do more themselves to understand whether the cover they have is what they need."

"Across the industry we know that insurance is a reliable and critical way of providing financial protection when things go wrong, whether it involves a family member, a personal possession or a business. In the vast majority of cases, insurance claims are accepted and there are additional and very important support services that help customers get back on their feet.

"When it comes to making a claim we want Aviva customers to feel really clear about what they are covered for, so we are actively looking at ways that we can help them understand their cover in a simple and unequivocal way. This is something that we believe the whole industry needs to commit to on behalf of customers."

UK claims paid by Aviva in 2017

To view the table, click here: https://www.aviva.com/newsroom/news-releases/2018/07/aviva-first-UK-claims-report/

Source: Aviva UK claims report 2017

Common reasons for a claim being declined

Just 4% of UK claims across individual and commercial business insurance were declined last year by Aviva. Common reasons include:

* Lack of additional cover to the standard policy - eg if a customer didn't choose additional cover as part of a home insurance policy for events such as accidental damage or cover for damage to belongings outside of the home

* Making a claim for something that falls outside of the policy terms - eg the effects of gradual wear and tear or damp and dry rot are not covered by a standard home insurance policy

* The policy definition for a claim is not met - eg some critical illness claims were declined because the condition the customer was claiming for was not covered by their policy

* A pre-existing health condition/lifestyle choice was not declared - eg pre-existing health conditions or lifestyle choices that are not declared by the customer during the application process can lead to group and individual protection claims being declined

Source: Aviva UK claims report 2017

Read the full Aviva UK claims report (https://www.aviva.com/content/dam/aviva-corporate/documents/newsroom/pdfs/reports/aviva-UK-claims-report-2017.pdf)