The release of the risk store’s 2008 industry claims statistics forms the basis of our latest riskinfo poll.
We want to know whether your client engagement would be enhanced if you were able to access more information from the life companies that highlights the nature and extent of claims paid to Australians.
There is an almost universal lament within the insurance community that the Australian public believes the life insurance industry simply does not pay claims, or at least does not pay enough. It is an excuse used often when clients and prospective clients deal with financial advisers and an attitude that also discourages many advisers.
… the challenge for advisers and the industry is to have that positive message understood and absorbed by the consumer
The opposite is the case, as demonstrated by the risk store’s 2008 claims statistics, and IFSA’s latest industry claims report (see riskinfo article IFSA Releases Results of Claims Experience Investigation). But the challenge for advisers and the industry is to have that positive message understood and absorbed by the consumer.
Traditionally, life companies have been reluctant to release information about their claims experience. The reasons are serious and practical – the more detail an insurer releases about its claims history, the better chance there is of its competitors and others determining its underlying profitability when combining claims data with statutory (public) reporting required by APRA. In other words, the information is ‘market sensitive’.
But in recent years, the tide had begun to turn. It’s turning slowly, but it’s turning, with a number of insurers releasing more and more detail about the make-up of their claims book, such as the breakdown of trauma events, the overall dollar value and proportion of claims per event and category, as well as average claims paid per insurance category (ie Death, TPD, Trauma, Income Protection).
In the United Kingdom, life companies are more ‘generous’ than their Australian counterparts in terms of the amount of detail they release for public consumption. This has been due, in part, to the adverse and biased electronic media campaigns in the early part of this decade that targeted the life companies as un-caring institutions who found any excuse to decline a valid claim.
Ironically, the open-ness of the information that is now availabe in the UK has been partly responsible for the enhanced reputation of the life insurance industry in that country.
But on a day to day level, would access to more information about claims statistics be of value to you in your dealings with your clients? Or do you believe that more access to claims information from the life companies will make little to no difference to the way you conduct and manage your client relationships?
There are many more points of view and cases that can be made, both for and against this question, and we encourage you to have your say in our Comments forum at the end of this article.
So, have your say and make your voice heard.
Congtatulations to Sue Laing in her work in this arena.
I go back to July 1993, as I had a lot of dealings in the risk area with a great insurer that has regretably been recently sold.
This insurer provided every month a full report on every claim that it paid, breaking the claims down into each category of cover as well as amount paid, the cause with written explanations, the sex, the age at time of claim ,the number of years the policy was in force and type of policy.
Not only that, this insurer also gave full details of the type of add on benefits that were paid on income protection benefits. This enabled me as an adviser to ascertian what were really the usefull ‘ bells and whistles” benefits, as we described then and to this day.
From these figures I became to understand how such ailments such as depression affected claims, as this partricular ailment started to surface in claims around this time.
Another great benefit was that i had access to the Claims manager and could discuss some of the claims as described, obviously no client names etc and from this I was able to develope a very good understanding on how this insurer handled claims.
I was able to convey this confidence to my existing and future clients as well as showing them the written monthly claim statistics…Did it work ? my word it did !
Also…through this relationship I also found out why some claims were NOT paid and what were the percetages, as this was also important to me.
This insurer provided these detailed monthly claim reports all the way to October 2003 when the Claims manager retired !
From this I had confidence to keep this insurer on our approved list and to this day they still handle claims well.
I would like to see more transparency, it is highly useful to me and my clients. I understand that one can obtain the reports that the Life insurers provide to APRA, however I understand there is a large cost to obtain this information.
I guess that I have an important decade of claims information from an excellent insurer .
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