Regulators Confirm High Levels of Claims Acceptance


More than 90 per cent of life insurance claims lodged during 2016 were accepted by life insurance companies, according to new data released by APRA and ASIC.

APRA Member, Geoff Summerhayes

The data revealed that of the 103,100 claims finalised in 2016, 95,000 – or 92.1 per cent – were accepted by life insurers. A further 8,100 – or 7.9 per cent claims were declined, according to the data, which was released as an industry-aggregate.

The total number of finalised claims represented 81.6 per cent of all claims reported, which totalled 126,300, of which 5.1 per cent (6,400) were withdrawn and 13.3 per cent (16,800) were undetermined at the end of 2016.

The data was collected as part of a joint research project by the two regulators to improve reporting of life insurance claims performance across the industry (see: Regulators Begin Collection of Claims Data).

Information was gathered from 16 insurers who provided approximately 12,500 unique potential data points each, across the areas of policy statistics, claims data and dispute data for term, TPD, trauma and income protection products.

“The analysis of this initial data reinforces the findings of ASIC’s Report 498…”

Commenting on the data, ASIC Deputy Chair, Peter Kell said, “The analysis of this initial data reinforces the findings of ASIC’s Report 498 that over 90 per cent of life insurance claims are paid in the first instance by insurers” (see: Direct Insurance to be Reviewed as ASIC Finds Claims Issues).

In an information paper supplied with the results, APRA noted that the data in this initial report was “…not of sufficient reliability and comparability to support entity-level publication” but was “…sufficiently robust to release publicly at an aggregate industry level”.

“Publication of aggregate level data is an important step towards achieving the objectives of this initiative, and will materially enhance transparency and inform public debate,” the paper stated.

Insurers also struggled to report all the requested data according to specified definitions and used different definitions for what constituted a reported, declined or withdrawn claim which reduced the comparability of the data, the paper added.

As a result of these differences, ASIC and APRA would, for the first time seek to formalise standard definitions used by insurers in the second round of data collection.

APRA Member, Geoff Summerhayes said, “We are now focusing on the ability of insurers to report according to these common definitions, including how they can do their best to manage system constraints. While significant progress has been made, there is still more work to be done to fully embed the definitions across the industry”.


  1. Well I will be buggered….. Churning is not an issue, Insurance companies are paying claims, what was the problem again?? oh that’s right Insurance companies weren’t making enough money!! All the reviews that have been undertaken has been based on lies. What a JOKE!!

  2. This is a bloody disgrace. The damn witch hunt that went on for advisers heads is now proving to be exactly what we advisers always said was the case.

    As Paul says below, no major churning issue (what there was could have and SHOULD have been eradicated by the insurance companies anyway) and claims for retail policies were being paid (I’d like to see the numbers for Direct Insurance claims).

    So incomes have been capped, responsibility periods lengthened and education standards heightened. Mmm…..who are the winners out of all this, I wonder?

    Sure as hell isn’t the people at the coal face doing all the hard work with Australian’s needing the cover!!!!

    • Hi TFR…the problem is no-body cares about the Risky anymore…over the last 20 years we’ve built their businesses to what appears to be saturation point, so now it appears as though the only way to profits is to screw the adviser by as you say reducing income and extending responsibility periods. And screw the client by using bad claims history as the excuse (not the reason) but the excuse to increase rates…I find it interesting that Level Premiums are increasing more than stepped premiums in certain cases…could this be because the Insurance companies know the Level Premium clients will not cancel as they are the true believers…or are Level Premium clients now simply trapped and just like in General Insurance the Life companies are now trying to manage the risk by forcing customers to cancel…Lives and health is NOT like a damaged car or home.

      There’s also been a lot of banging on about the gross under-insurance issue in Oz…but people with the deep pockets have done nothing to help promote Advisers and the pitfalls of group and direct insurance…the hole thing is a sham and makes absolutely no reasonable sense.

      If there is to be a Royal Commission, then investigate how Acturaries can get it so horribly wrong and why Non-Underwritten Group policies still exist…maybe non-underwritten group policies still exist to cater for all the unhealthy partners of law firms who couldn’t obtain their own personal cover via a fully underwritten retail policy…

      I don’t pretend to know exactly how the claims figures are produced, however it seems to me that a claim is a claim and every claim ends up in the same pool of figures & statistics regardless of whether the claim was from a Fully UW Retail policy; Non-UW Group Policy or a Direct Policy…the way I see it, all claims shouldn’t be included in the same figures and they sure as hec shouldn’t be support for Life Companies to have FREE reign to increase rates when-ever they wish without any cap on the amount of the increase. All seems a bit immoral to me…

      • Thanks for replying. I’m with you on so many of these points – mostly about it all being a bit immoral. My problem is I operate on a totally honest platform where integrity is a key focus. I’m realising more and more that I’m in a minority group and its not working anymore.

        ASIC are our biggest challenge too because their existence depends solely on continually finding fault so even if it isn’t there, they’ll fabricate it – as we saw in Report 413.

        It just leaves this TFR wondering what’s next…?

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