The risk store has released its 2010 industry claims summary, revealing a significant increase in claims paid across the four key product categories.
In the calendar year 2010, the total value of risk insurance claims paid to Australians exceeded by 28% the value of claims paid in 2009. These claims were spread across term life, TPD, trauma and income protection policy categories, each of which experienced strong increases.
For the first time this year, in response to adviser requests, the risk store has also collated the actual number of successful claims that were paid. For example, there were 5,477 successful TPD claims in 2010, which paid a total of just under $461 million. This means the average TPD claim paid was approximately $84,000.
In its release the risk store points out that these figures don’t include ‘… all the vast amounts that are paid from superannuation funds’ group insurance policies for early retirements due to illness, injury and death,’ meaning the total claims paid in reality is much higher than shown in this retail report summary. The risk store added there will be also the ‘hidden’ claims paid from self-insured group superannuation life and TPD cover that should be added to the totals, but which are impossible to determine.
Commenting on the 2010 release, risk store founder, Sue Laing, said it is impossible to pinpoint the precise reasons for the increase: “Some of it is clearly attributable to more group life claims as a result of the last few years of improvements to insured group life schemes which are administered by the retail insurers. Some is clearly reflective of more premiums being written in the retail space, which supports the latest Rice Warner findings of a decrease in the underinsurance gap.”
Ms Laing also pointed out the risk store had engaged one additional insurer in the 2010 research, but their involvement only accounted for a part of the 28% increase.
… not enough is told to consumers and existing clients about the claims message
Whatever the reasons, the risk store’s CEO Peter Wincott maintains that not enough is told to consumers and existing clients about the claims message. “This can counter the intangibility issues that so many consumers struggle with. Yet we are always surprised at the number of advisers who don’t use these statistics as sales support tools,” he said.
This is the fifth year these statistics have been complied and published and the risk store says it has seen a vast improvement in insurers’ engagement in the collation process: “Our goals didn’t seem to resonate at first but this year we had tremendous and speedy cooperation from all insurers, so we think the message of telling the world how well we do what we do as an industry is getting through.” said Mr Wincott.
Full details of the 2010 statistics are available for risk store members to download from its website.
