2 February 2015
We’ve changed our life insurance ratings
When we launched our life insurance ratings last October, it caused something of a storm in the insurance industry. While the criticisms came in thick and fast from the insurers, the one thing that seemed to upset everyone the most was the way we presented their claims scores.
Life insurers all publish the percentage of claims that they pay each year. And almost everyone comes in at between 93% and 100%. But using our statistical algorithm, we turned these into scores that ran all the way from 0% to 100%. Although we use this technique in all our scoring, we accepted that it was much more provocative in life insurance, where everyone was paying a high percentage of claims.
Our scores are also published on Cavendish Online, and we could see that in this live purchase environment, there was a risk that our scores could be misinterpreted. We certainly didn't want to leave customers thinking that any insurer only pays 10% or even 50% of claims.
A new methodology
So today we've started publishing our life insurance ratings in a different way. In each category, we present the raw, unmanipulated underlying data (although we still use some statistical tricks behind the scenes to come up the final Fairer Finance score for each brand).
We believe there's still more work to do to improve our ratings, but we've reached the point where we need insurers to help us by providing more data. We'd like to include the average time that it takes insurers to pay a claim. And we believe that insurers could provide us with more detailed claims data - so that we can more clearly see which insurers are doing the best job on paying claims, and which ones are rejecting claims when others might not.
To date, insurers have been resistant to working with us - and we're hoping that by showing our willingness to be flexible, we can edge the industry towards being more transparent.
We're considering rolling out this new methodology across all our ratings when we refresh them in the spring. But if you've got any suggestions as to how we could improve the information on our site - either now or in the future, do get in touch. You can email us at firstname.lastname@example.org.