The Australian Prudential Regulation Authority (APRA) has released the 2018 calendar year claims and disputes data for the life insurance industry.
APRA and the Australian Securities and Investments Commission (ASIC) set up the data collection system to make it easier for consumers to compare insurers based on claims and and disputes handling.
Key findings include:
Most claims are admitted across all cover types - 93 per cent
There is a difference between admittance rates of claims for those who do and do not receive financial advice at claim time, which was most stark for total and permanent disability (TPD) cover with unadvised claims accepted only 59 per cent of the time compared with advised client claims admitted 87 per cent of the time
Advised clients were more likely to have a claim paid
Bucking this trend, individual advised accident business had an extremely low admittance rate compared to non-advised (19 per cent versus 82 per cent of claims), however APRA was advised by the provider that some limitations in this data set exist
The main reason that claims are not admitted is where the contractual definition has not been met
A very small portion of claims are denied due to unintentional non-disclosure and fraud
There can be a vast difference between insurers in terms of the time taken to pay claims
The data covers 20 Australian life insurance companies providing direct business.