IFSA and KPMG Actuaries have released the results of the largest ever investigation into life insurance claims experience, with the results confirming established rating factors.
The investigation covered more than 16,000 claims on lump sum insurance products between 2004 and 2006, and confirms what IFSA refers to as ‘long standing rating factors’, such as age, gender and smoking status, across mortality and trauma events.
The investigation also indicates that people living in the ACT live longer and healthier lives than anywhere else in Australia.
Key findings from the investigation include:
- Females continue to experience lower mortality rates than males of the same age and smoking status
- Mortality for both males and females continued to improve over the last 10 years
- Trauma and Total and Permanent Disability (TPD) claims incidence rate improved at a faster rate than mortality rate for the insured population over the last 10 years
- Insured lives in the ACT experienced much lower rates of mortality than insured lives in other states
- Insured lives in the ACT and Tasmania experienced much lower incidence of trauma rates than insured lives elsewhere in Australia
- Insured lives in New South Wales, Victoria and Queensland experience similar level of mortality and trauma claims
Cancer for females … accounts for 81% all trauma claims
- Cancer continued to be the dominant cause of trauma claims over the period of investigation for both males and females, but especially for females, where it accounts for 81% all trauma claims
- Blue collar workers experienced significantly higher levels of TPD claims than white collar workers
On a cautionary note, IFSA CEO, John Brogden, noted the low average claim pay-out figure: “The average claim paid out was $132,537, which at first blush, may seem substantial, but when you weigh that up with the average Australian debt commitment, there is still a significant risk protection gap,” said Mr Brogden, who urged people to check their level of risk cover with the tools provided on IFSA’s Lifewise website.
Outcomes from this investigation, together with data from 2007 claims, released earlier this year, are expected to be used to update life insurance tables used by APRA to determine capital requirements for insurance companies operating in Australia.
