Life Insurance Only Small Percentage of AFCA Complaints

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Complaints related to life insurance make up a very small proportion of all the financial complaints lodged with the Australian Financial Complaints Authority, its updated online comparative reporting tool shows.

The AFCA Datacube, which now includes information about all financial complaints lodged with AFCA from 1 July 2019 to 30 June 2020, shows that life insurance accounted for just 2.81 percent of all financial complaints progressed.

Credit cards, housing finance and deposit taking /payment systems were the top product areas of complaint followed by consumer loans and home building insurance.

Courtesy of https://data.afca.org.au

In a statement AFCA says the updated Datacube allows historical comparison with complaints data from AFCA’s inception on 1 November 2018.

Drilling further down into the life insurance data, the proportion of complaints per product type revealed:

  • Income Protection: 35.8 percent
  • Term Life: 25.9 percent
  • TPD: 12.39 percent
  • Trauma: 11.7 percent
Courtesy of https://data.afca.org.au

The authority explains in the statement that its Datacube allows anyone to see how insurers, banks, superannuation funds, or other financial firms handle consumer complaints that are escalated to the Ombudsman.

AFCA’s CEO and Chief Ombudsman David Locke says that this free tool provides the public with “… transparent and accessible information about complaints handling right across the financial services sector. It also allows financial firms to see how their complaints handling compares with others in the market”.

The AFCA Datacube includes information about the number of complaints lodged about a financial firm, how long it takes a firm to resolve a complaint, and whether a financial firm responds to complaints in a timely manner. It also allows people to compare financial firms side-by-side, the authority says.



2 COMMENTS

  1. I would love to know what percentage of the 2.81% of Life Insurance claims relate to the Direct channel. Does anyone know? Does AFCA separate Direct from Advised insurance? Regardless, we don’t hear of Credit Cards or Housing Finance – two of the major areas of complaints – being hit with the demands now placed on retail life insurance advisers.

  2. The AFCA Datacube shows 100 complaints about Financial Advisors regarding Life Insurance. This equates to 0.13% of total complaints (76,880) to AFCA for the 12mths to 30/06/2020. 41 of these complaints were about Commonwealth Financial Planning & AMP. Resulting in only 0.076% of complaints against medium to small financial advisors.

    The comment from David Locke, Chief Executive of AFCA:
    “That’s fantastic, we’ve had more than enough complaints about banks and insurers and we’re very happy to get few complaints about financial planners…
    “If only other sectors were like yourselves, then we wouldn’t have much business and one of my targets and KPIs is reduce numbers, not increase numbers.”

    Leading to the obvious question – ASIC & LEGISTLATORS WHERE’S THE PROBLEM?

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