By Jamie Lankey, Technical Services Director, RGI
Misrepresentation continues to play a significant role in shaping the reliability and long‑term sustainability of the UK income protection (IP) insurance market. As expectations increase around fairness, clarity, and consistency in claims handling, insurers and advisers face mounting pressure to improve how inaccurate information is identified and managed at both the application and claim stages. Strengthening these processes is increasingly viewed as essential to protecting consumers and stabilising the wider market.
Understanding Misrepresentation and Its Impact
Misrepresentation occurs when incorrect, incomplete, or misleading information is provided during the insurance application process. While this may be intentional in some cases, it often results from misunderstanding, ambiguity in questionnaires, or reliance on memory. When discrepancies only come to light at the point of claim, the consequences can be significant for both customers and insurers.
Recent industry figures illustrate the scale of the issue. According to the Income Protection Task Force, just over 52% of declined income protection claims in 2024 were rejected primarily due to misrepresentation identified during the claims investigation. Insurers also estimate that 5–10% of IP claims are declined each year, with more than half of those cases linked to previously undisclosed medical, occupational, or lifestyle information. These patterns suggest that the root causes extend beyond individual behaviour and reflect broader structural challenges in the application and underwriting process.
The implications reach beyond the immediate decline of claims. Inaccurate or incomplete applications distort risk assessment models, creating an imbalance between premiums collected and the actual level of exposure. When this occurs across a large portfolio, it can contribute to upward pressure on pricing, ultimately affecting affordability for consumers. Misrepresentation‑related disputes also generate operational costs, place advisers in difficult positions, and can erode trust in protection products—an area where the industry is already working hard to improve public perception.
Where the Industry Can Improve
Industry bodies such as the Association of British Insurers (ABI) have long emphasised the need for fair, proportionate, and transparent approaches to handling misrepresentation. The ABI Code of Practice offers guidance on how insurers should investigate both omissions and inaccurate disclosures while maintaining clear communication with customers throughout the claims process.
Opportunities for improvement include:
- Raising the quality of data collected at application stage
Enhancing the accuracy and consistency of medical, occupational, and lifestyle information—ideally through structured digital tools—reduces reliance on memory and minimises ambiguity. - Improving clarity of communication and question design
Consumers often struggle to interpret broad or technical questions. More precise wording, examples, and context can help applicants understand what information is required and why. - Enhancing post‑issue sampling and analytical tools
Proactive use of data analytics and selective post‑issue checks can highlight inconsistencies earlier, reducing the number of issues that surface only at claim stage. - Maintaining a balanced, human‑led investigative approach
While technology plays an increasing role, trained investigators continue to be essential in establishing context, assessing proportionality, and ensuring fair treatment. - Strengthening industry‑wide collaboration
Greater standardisation of key medical and lifestyle question sets would reduce customer confusion and improve disclosure accuracy. Shared learnings, improved consistency in interpreting materiality, and responsible information‑sharing (within regulatory boundaries) could further reduce systemic exposure.
The Evolving Role of Investigators
Specialist investigation firms play a supporting role by helping insurers validate information and understand discrepancies. Common services include desktop intelligence reviews, structured interviews, and field‑based fact‑finding conducted by experienced professionals. When used appropriately, these methods can help insurers reach fair outcomes, reduce claims disputes, and ensure that genuine customers receive the support they are entitled to without unnecessary delay.
To find out more about RGI and how we support the protection sector, visit: https://rgisolutions.co.uk/
