Life insurers operating in the Australian market are resolving a large percentage of consumer disputes via agreements with most resolved without the need for a binding decision against the insurer, according to statistics released by the Financial Ombudsman Service (FOS).
The comparative statistics, released by FOS reveal that of the 14 life insurers who are members of FOS, nine resolved between 40% and 53% of disputes by agreement during the period from 1 July 2015 to 30 June 2016. This group includes ClearView, AMP, MLC, TAL, Colonial Mutual, Suncorp Life, Macquarie Life, National Mutual and Westpac Life.
The FOS statistics also indicated almost every life insurer was resolving disputes at the same stage of the FOS Dispute Process either through negotiation or conciliation facilitated by FOS or by FOS providing an Assessment or written Preliminary View on the outcome of a dispute.
While a number of disputes are going through to an Assessment, FOS has continued to make binding determinations which have neither favoured consumers or life insurers on the whole.
Despite this some insurers have fared better in determinations with ClearView, Westpac Life and St George Life having at least 40% of determinations ruled in their favour. In comparison, AIA Australia, MetLife and Zurich have had at least a third or more of determinations ruled against them in favour of consumers bring disputes to FOS.
“…half of the 14 life insurers who are FOS members also have a low likelihood of having a dispute with consumers…”
At the same time, half of the 14 life insurers who are FOS members also have a low likelihood of having a dispute with consumers based on an equalised weighting system adopted by FOS.
FOS said the level for a chance of a dispute was based on the number of disputes about a life insurer in a product group (eg: trauma, TPD) divided by the number of accounts or policies the life insurer had in this product group, multiplied by 100,000.
FOS stated this method ensured that comparisons could be made between insurers of different sizes and produced a median dispute level figure of three while those insurers below that level in its comparative statistics ranged from 0.3 disputes per 100,000 people to 2.1 disputes per 100,000 people.
The figures for insurers above the median ranged from 3.9 disputes per 100,000 people to 19.7 disputes per 100,000 people despite a number of these insurers ranking highly in the resolving disputes by agreement.
FOS did not break down whether the insurers in question attracted complaints and disputes from the direct, group or advised markets or across some or all of those markets.
The Service stated it was making the comparative data available so consumers could find out how likely other consumers were to lodge a dispute about a particular product from a particular life insurer and what the outcomes of disputes to date have been, which may in turn help them decide which insurer to use.
In its most recent annual report FOS stated that of the 20,298 disputes accepted in 2015-2016 only 1095 (5%) related to life insurance of which around 7-8% of the 1095 disputes related to financial advisers.
The FOS comparative statistics were released at the start of October and predate the recent ASIC review into life insurance claims levels which found some life insurers had high levels of denied claims in the areas of trauma and TPD.
So, of the 20,298 FOS disputes accepted, 77 to 87 were from complaints against advisers, which equates to less than half of one percent for Life Insurance advice and the other 99.6% were nothing to do with Life Insurance advice.
Yet the focus from THE FSC and Government who fell for the lies and mis-truths perpetrated by the FSC, has been to take away Business revenue and severely restrict the advisers who have had the least complaints and the most success representing all Australians with claims.
Surely, the Government must be able to see from the FOS report, on top of all the other clearly articulated evidence, that the argument to put all responsibility onto Adviser Businesses, with no documented proof or evidence that their tabled LIF Regulations will benefit anyone, except the Life Companies profits at the expense of all Australians, has nil merit.
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