Non-disclosure campaign sees rise in critical illness payments

Article date: 1 October 2007

Norwich Union has announced an 11% increase in critical illness payments since 2005, following a series of initiatives to drive down non-disclosure. According to the insurer's latest Critical Insurance Claims Report, 80% of 2006 CI claims were paid, followed by 86% during January-June 2007. This compares to 75% of claims paid in 2005.

The announcement follows a series of initiatives designed specifically to drive down non-disclosure rates on protection products, including critical illness cover. Over the last 12 months the UK's leading insurer has spearheaded a sustained campaign to educate consumers about the importance of full disclosure on applications.

In July Norwich Union launched a pilot where 5,000 existing protection policyholders were asked to review their original application forms and supply any medical information they may have missed at the outset of their application. This was designed to draw people's attention to the issue of "non-disclosure" and ensure they have the correct level of cover.

February 2007 saw the company introduce a telephone service staffed by nurses to help gather information on some of its protection product forms and speed up the application process. Further moves include producing various reminder tools for both customers and financial advisers including leaflets in application packs and checklists for intermediaries.

Furthermore, in August 2007 Norwich Union was applauded for being the first insurer to apply new ABI critical illness conditions to policies retrospectively. New and existing policyholders can now claim for traumatic head injury as a result of these changes.

Willie Mowatt, director of risk products for Norwich Union, said: "Non disclosure is a huge concern throughout the insurance industry, which is why we are delighted to see more and more people helping to stamp out the problem. Early indications from our pilot have shown an excellent response rate from existing customers providing extra information to ensure they have a valid policy.

"By taking the time and care that protection applications deserve and providing their insurer with full, accurate medical information, customers can be sure that they have a valid policy which will provide a payment in the event of a legitimate claim. As a customer-focused organisation it is our goal to pay 100% of claims. By educating consumers about the importance of full disclosure, we are steadily working towards this target."

Norwich Union's 2006 critical illness report revealed:

Payouts on critical illness (CI) policies increased to more than £90m in 2006, a rise of almost 11% against 2005 figures. In total, 1,306 claims were paid and the average payout was just over £69,000.

The top five causes for claims in 2006 were:

  • Cancer  62.8%
  • Heart attack  10.1%
  • Multiple sclerosis  6.4%
  • Stroke  5.2%
  • Total permanent disability 4.4%

Seven times as many men claimed for a heart attack than women, and six times more males claimed for heart surgery. In contrast, 62% more women claimed for cancer than men and three times as many women claimed for multiple sclerosis.

In 2006, a typical critical illness policy had been in force for less than five years (average of four years and seven months) at the time of claim.

The number of claims rejected for non-disclosure of medical facts at the policy's outset fell by a quarter in 2006, with 9% declined for this reason compared to 12% in 2005. Claims rejected due to criteria not met dropped from 11% in 2005 to 9% in 2006. Significantly, of the 13.5% of claims rejected during the first half of 2007, only 6% were due to non-disclosure.

The average age of female claimants was 41, compared to 43 for males.

Willie Mowatt, adds: "Critical illness policies help people to ease the financial burden in the distressing event of contracting a critical illness, offering peace of mind when it is needed most. In 2006 Norwich Union paid out more than £90 million to such people, and this looks set to rise further still during 2007.

"However, critical illness claims can only be paid if the customer has a valid policy and their claim meets the policy criteria. Many insurers face harsh criticism for not paying claims, but the system is a two-way street where customers and their advisers need to play their part. Critical illness cover is not a ‘catch-all' insurance, but offers financial assistance against a range of specified serious conditions.

"In order to ensure that a claim will be met, people need to ensure they have a valid policy - by fully disclosing on their application - and checking that their illness meets the criteria of the policy provided. If this was done in 100% of cases, 100% of claims could be paid."


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Sarah Horner 01904 452828 Out of hours 07800 691569
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Notes to editors:
Norwich Union is the UK's largest insurer.  It is a leading provider of life, pensions and investment products and one of the largest financial adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.

Norwich Union is the UK's largest general insurer with a market share of around 14%, with a focus on insurance for individuals and small businesses.

Norwich Union's news releases and a selection of images are available from Aviva's internet press centre at

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