APRA Releases ‘World-Leading’ Life Insurance Claims Data

APRA has released its Life Insurance Claims and Disputes data for the 2018 calendar year, in which the value of advised life insurance claims is evident, particularly for TPD claims.

In what the regulator positions as the product of a ‘world-leading joint project’ between itself and ASIC, this claims data is intended by APRA to make it easier for consumers to compare life insurers’ performance in handling claims and disputes.

One of the headline tables in the 2018 data is claims admittance rates across Death, TPD, Trauma and DII. The data reinforces the value of advisers at claim time, particularly when it comes to TPD claims, where a significant differential exists in admittance rates for Individual Advised compared with Individual Non-Advised claims:

This table is taken from APRA’s Life Insurance Claims and Disputes Statistics Report for the period 1 January 2018 – 31 December 2018. Note the significant differential that exists between advised and non-advised TPD claims, but also the gap that also exists for Death and DII claims.

 

This data shows the vast majority of all claims are admitted, while the following table summarises the main reasons provided by life insurers for declining a claim, where the main reason is where the claim contractual definition has not been met:

Taken from APRA’s Life Insurance Claims and Disputes Statistics Report for the period 1 January 2018 – 31 December 2018. Note in this table the very small proportion of claims declined due to unintentional non-disclosure and fraud…

Company-level claims data is also available via ASIC’s MoneySmart Life insurance claims comparison tool, which has been updated with the latest data. This online tool compares insurers across cover types and distribution channels on four metrics:

  1. Percentage of claims accepted
  2. Length of time taken to pay claims
  3. Number of disputes
  4. Policy cancellation rates

An example of one of the many claims comparison tables available on the MoneySmart website is provided below:

One of many comparison tables available from the ASIC MoneySmart life insurance claims comparison tool…

These tables make for interesting reading, particularly when comparing the sometimes significant difference in the average time taken to pay claims. Click here to access company-level claims data comparisons available on ASIC’s MoneySmart website.

This is the second publication of Australian life insurance claims data following the launch of this service earlier this year (see: Insurers Identified in ‘World-First’ Claims Data Release).

  • Rob

    This is great news for advisers and their advised clients. Pity the press are not interested. But then good news about advisers is not what they like to talk about. It does not generate enough of their interest, and hence does no good for their conflicted listed stock price.

  • John Galt

    IMHO policy cancellation rates are about the only thing relevant and worth discussing with the client. High cancellation and lapse rates can have a long term impact on premium stability.

    The claims stuff is all fluid and not relevant to a long term product like life insurance. ASIC probably knows this, but that doesn’t help appearances does it.