Aviva apparently paid 96% of the claims it received in the United Kingdom in 2017. Data from the company’s UK claims reports indicates just 4% of claims were rejected.
Aviva UK paid 961,973 claims valued at £3.6 billion across its commercial and individual lines in 2017. The pay outs included auto, home, travel, health, and business policies, Cover Magazine noted.
Aviva’s claims-payment rate was higher than the industry average, The Financial Times observed. The Financial Conduct Authority estimated that between 92% and 94% and of home-insurance claims result in payment. Aviva UK reportedly paid 95% of its home-insurance claims.
These figures did not include the £327 million Aviva UK paid out in personal protection claims in 2017. Aviva paid 97.2% of its personal protection claims in the United Kingdom last year.
One in 10 travel insurance claims rejected
Aviva UK’s highest rejection rates were for income protection and travel insurance claims.
The company rejected nearly 10% of those claims. The high claims-rejection rate is raising concerns that such policies are too complex for average consumers.
The most common reasons for claims rejections were items outside of policy, lack of additional coverage, and failure to meet the claim definition, an Aviva press release indicates. Failure to report pre-existing health conditions and lifestyle choices was also a major reason for claim denial.
The press release indicates a few policyholders were unfamiliar with the terms of their policies. Many claims were apparently rejected because consumers were confused about coverage.
Many of the refused claims were for items that would have been covered by add-ons. Policyholders failed to buy the add-ons because they did not know they needed them.
This indicates that Aviva UK needs to improve its education efforts for policyholders. Better communication between the insurer and the insured is also required.
Insurance policies too hard to read
Consumers may have been confused by the policies because they were too long. Claims rates were higher for business insurance policies that contained more than 269 words.
The higher pay-out rates for personal protection and home claims indicate that those policies are easier to read. Recent research from KPMG indicates that some business-insurance policies can take up to two hours to read.
Renters’ policies are apparently easier to read. KPMG found that it takes one hour to read a typical home-renters policy.
Aviva claims details
Aviva’s 2017 claims report provides some interesting details about its UK operations. Details that stand out include:
- Aviva paid for repairs on 120,000 vehicles in 2017.
- Aviva paid £10 worth of claims each day in 2017
- Aviva paid an average of £7,000 in claims a minute in 2017.
- Around received 240,493 digital claims from UK policyholders in 2017.
- That means 25% of Aviva’s UK claims are now transmitted digitally.
Aviva Settled 99% of its motor insurance claims
- Aviva settled 99.3% of its motor insurance claims in 2017.
- Aviva settled 347,035 motor insurance claims in 2017.
- Aviva settled 95.2% of its home-insurance claims in 2017.
- Aviva settled 89.3% of its travel insurance claims in 2017.
- Aviva settled 87,609 home insurance claims and 99,532 travel insurance claims in 2017.
Commercial property insurance
- Aviva settled 98% of its commercial motor insurance claims in 2017.
- Aviva settled 152,734 commercial motor insurance claims in 2017.
- Aviva settled 93.6% of its commercial property insurance claims in 2017.
- Aviva settled 38,058 commercial property claims in 2017.
Aviva pays a high rate of claims
The high rate of payments extended to life and medical insurance.
Aviva paid 98.9% of the life insurance claims it paid in 2017. The company paid 16,314 life insurance claims for £525.514 million.
Aviva also paid £337,394 million to settle 4,413 critical illness claims, a payment rate of 93.2%. The company paid £36.394 million to settle 3,918 income protection claims, a paid rate of 88.8%.
For private medical insurance Aviva UK paid 94.1% of claims received. It cost Aviva around £404.838 million to settle 206,037 private medical claims.
Group protection claims cost Aviva £327.749 million in 2017. Aviva was able to pay 92.5% or 5,534 of the group protection claims it received.
Fracture claims were one of the smallest coverage areas at Aviva. The company paid just 789 or 94.1% of them for £1.687 million.
The rate of payment indicates that most Aviva policyholders understand their policies and the claims process. Aviva appears to have achieved a high rate of efficiency in its UK operations.