Insurers Identified in ‘World-First’ Claims Data Release

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Detailed individual life company claims records have been released to the Australian public for the first time.

In what is claimed to be a world-first, regulators APRA and ASIC have combined to deliver an immensely comprehensive analysis of life insurance claims and disputes statistics.

A series of publications on the claims data includes an online tool available on ASIC’s MoneySmart website (click here). This package offers advisers and consumers the opportunity – for the first time – to compare and contrast each life insurer across a range of claims metrics for four distribution channels, namely:

  1. Individual Advised
  2. Individual Non-Advised
  3. Group Super
  4. Group Ordinary

The comparable metrics available within this online consumer tool include:

  • Percentage of claims accepted
  • Length of time taken to pay claims
  • Number of disputes
  • Policy cancellation rates

Advisers and consumers can access this claims information for cover types including: Death, TPD, Trauma, Disability Income, Consumer Credit Insurance, Funeral and Accident Cover.

Within the more comprehensive data released by APRA (click here), the same four distribution channels and cover types are the subject of various claims performance metrics including:

  • Claims outcomes
  • Claims admittance rates
  • Claims decline reasons
  • Claims withdrawn rates and reasons
  • Claims frequency
  • Claims paid ratios as a proportion of annual premiums receivable
92 percent of overall claims …were paid in the first instance

One of the headline statistics referenced in a statement from ASIC accompanying the release of the data is that 92 percent of overall claims  across all distribution channels finalised in the 12 months to June 2018 were paid in the first instance. This statistic was also highlighted – ahead of the release of the data – at the recent 2019 FSC Life Insurance Conference in Sydney. Riskinfo notes, however, that this statistic relates to a percentage of finalised claims; not to the percentage of claims received. See below for data taken from APRA’s report comparing ‘claims admitted’ data and other outcomes for the six months to June 2017 with the outcomes for the 12 months to June 2018:

For 2018, the data reports 83 percent of claims received were finalised, and of that 83 percent which could be finalised, 92 percent were accepted, or ‘paid in the first instance’.

Interestingly, this table also highlights a stark contrast in the the proportion of undetermined claims for the two periods, showing a significantly reduced rate of undetermined claims for the period ended June 2018 – only 13 percent undetermined in 2018 data, compared with 27 percent undetermined in 2017 data.

APRA Executive Board Member, Geoff Summerhayes, said the release of such broad and granular data on life insurance claims and disputes was world-leading practice among global insurance regulators:

This project represents a joint commitment to …holding life insurers to account for how they treat policyholders

“This project represents a joint commitment to enhancing industry transparency and holding life insurers to account for how they treat policyholders,” said Summerhayes.

Meanwhile, ASIC Commissioner, Sean Hughes, noted: “APRA’s data publication is complemented by ASIC’s MoneySmart life insurance claims comparison tool, which helps consumers make informed decisions when buying these complex life insurance products.”

ASIC advises data will be collected on an ongoing basis, and the resources will be updated twice yearly, with the next round of data set for release on 27 June 2019.