For the first time in its history, the Australian life insurance industry has paid out more than $5 billion in claims in a single year.
According to the latest risk store Claims Paid Statistics report, claims payments were up 13.7% year on year, for the period ending December 2013. Despite one additional insurer participating in the research this year, the risk store said the figures still well exceeded those reported in 2012.
Total lump sum claims paid increased by 15.6%, and income protection claims by 8.3%. Another notable statistic in the report was the increase in TPD claims paid, which risk store Managing Director, Pete Wincott, said pointed to the value of this type of cover.
claims payments were up 13.7% year on year
“The other shock statistic is how much was paid out every working day. We ran this past some of our non-industry business colleagues and they were gob-smacked. It just goes to show no-one has any idea,” Mr Wincott added.
The report, which shows the dollars paid, and numbers of claimants paid for each product type, also exposes the top claims causes. The risk store noted one significant shift from last year being the reshuffle of the incidence of mental illness and cancer claims in the income protection (IP) space. Historically, the number one cause of IP claims is musculoskeletal injuries, followed by cancer at number two, and mental illness rounding out the top three. However, this report shows that in 2013 mental illness surged ahead of cancer, to become the second leading cause of IP claims.
The 2013 statistics are available exclusively to members to download from the risk store website. The double-sided flyer showcases the claims statistics for advisers to use with prospective and existing clients.
Sue Laing, founder of the risk store, said: “We know after years of publishing these how useful they have proven to be for those ‘insurance companies never pay’ barriers that advisers face daily. Also, every adviser has their individual case studies to tell, but without the overall picture, those confronting numbers, it’s still a battle to get over the ‘ah yes but it won’t happen to me’ attitude. That’s why we make this point very clearly in the flyer – that not one of those claimants expected to claim.”