Life claims: balance of risk

I was delighted to be invited by Iress to contribute a comment to its Industry Voice in its latest magazine (page 15) which came out today.

https://www.iress.com/blog/industry-voice/

It's turned out to be extremely timely. given that, on Friday, the Financial Conduct Authority published the results of its multi-firm review of death claims processes in which it refers to claims being delayed waiting for probate. ?

Findings of our multi-firm review of life insurers’ bereavement claim process | FCA

The latest joint report from Swiss Re and Ruth V Gilbert from Insuring Change, shows that fewer than one-third of new single life policies were written in trust or with a beneficiary nominated in the policy in 2023. This presents the inevitable risk that claim payments are held up just when they are most needed but also that the payment goes to someone who was not intended to benefit at all.

In the report, we show that the average time from submission of grant application to issue for all grants in 2023 was 13.9 weeks. In 2024, there are signs of improvement in speed at the Probate Service, but only where there is both a valid will and executors able to act. The wait for administrators, with or without a will, has actually gone up.

While the review should lead to wider process improvements and better measurement, getting it right when the policy is arranged has to be the first step in preparing for when that claim inevitably happens.

Nathan Hill Charlotte Swaine Joanna Scott Nicole Egger Neal Ray Jacqueline Durbin Jane Irwin Phil Day Warren O'Connell Chris Hickman Louise Sarsby David Kidgell Laura Newman Iress