31 May 2018

Royal London paid out over £0.5bn in UK protection claims in 2017

6 min read

Lorna Wiltshire
Lorna Wiltshire

Lorna Wiltshire, Corporate PR Manager


Claims statistics for 2017, published today, show Royal London paid out over £517m and 99.1% of all claims received were paid.

Life insurance

Nearly £175m was paid in life and terminal illness claims. 97.3% of term life insurance claims were paid, with an average of nearly £113,000 per claim and 92.3% of terminal illness claims were paid with an average payout of just over £129,000 per claim.

Whole of Life

Over £128m was paid in whole of life claims and 99.9% of claims were paid. The average payout was just over £4,000.

Critical Illness

Over £200m was paid in critical illness (CI) claims. 91.2% of claims were paid, 2% were declined due to misrepresentation and 6.8% did not meet the policy definition. The average payout was nearly £108,000. Cancer was the top reason for a CI claim (61.8%), followed by heart attack (12.1%), stroke (5.8%), children’s critical illness (4%) and multiple sclerosis (3.6%). The average age of a CI claimant was 48 years old.

Income protection

Over £3.9m was paid in income protection (IP) claims. This total includes new claims and those already in payment. 92.1% of claims were paid. Of the 7.9% of claims declined, 5.5% were declined due to the policy definition not being met and 2.2% due to misrepresentation. The top three reasons for IP claims were for musculoskeletal conditions (28%), mental health conditions (19%) and cancer (12%).

As Royal London is a member of the Association of British Insurers (ABI) claims are also declared based on the number of new claims only, excluding claims in payment before 2017 that continued to be paid in 2017. Using the ABI method, the value of claims paid in 2017 was £620,000 and 72.9% of claims were paid. 36 claims were declined that made up 27.1% of new claims received. 18% were declined due to definition not being met and 9% were declined due to misrepresentation. In 2017 Royal London received a small number of new IP claims so the data pool is not statistically robust. The reason for declined claims is closely monitored and improvements are made to our proposition and customer journey to improve this wherever possible. Last year IP cover was extended to include fracture cover and hospitalisation benefit. Cover was extended to age 70 for a number of occupations; as people are living and working for longer this ensures the product meets the needs of today’s customer.

Free Cover

Over £700,000 was paid in free cover claims last year. Free cover is provided for up to 90 days while an application is being processed and will pay out in the event of a valid claim before any premiums have been paid. This can be crucial if a customer is waiting for a mortgage to complete.

Speeding up claims payments

Royal London introduced an electronic signature solution to speed up the payment of claims in November last year. The introduction of an electronic Access to Medical Records Act (e-AMRA) declaration using DocuSign technology removes the need for a traditional ‘wet’ signature on a paper claim form and reduces the time taken to make a decision and pay a critical illness claim.

Almost all are completed and returned within 48 hours compared to an average of 18 days to return a paper hand-written declaration. Implementing this in claims means we can pay claims earlier, releasing crucial funds to our customers when they need them most.

Craig Paterson, Underwriting & Claims Philosophy Manager at Royal London said:

"Paying a claim is our moment of truth and in 2017 we paid out over £0.5bn. This is a record amount and shows that the changes we have introduced to our claims processes and product definitions are translating into being able to pay more claims. Our fast-track claims process meant we were able to pay 85% of claims within two days. When we need medical evidence the introduction of an e-AMRA has reduced the time taken to obtain a customer’s consent from an average of over three weeks to just 48 hours. These changes mean that people who claim can be paid without delay."

- ENDS -

For further information please contact:

Lorna Wiltshire, Corporate PR Manager

Note to editors

£517m - Royal London UK Protection business claims paid (1 January to 31 December 2017) 

* Royal London UK Intermediary Protection business claims paid (1 January to 31 December 2017) 

Income Protection (IP) claims - ABI Method of reporting claims 

  • ABI members have changed the way IP claims are reported; 
  • This is the second year we have included this method; 
  • Using the new method, only new claims paid or declined in 2017 are reported; 
  • Claims in payment before 2017 that continued to be paid in 2017 are no longer included. 

About Royal London:

Royal London is the largest mutual life, pensions and investment company in the UK, with funds under management of £117 billion, 8.8 million policies in force and 3,745 employees. Figures quoted are as at 30 June 2018.