The prevalence of breaches related to claims handling obligations, which rose by 18% in the 2022-23 year, is highlighted in the latest report released by the Life Code Compliance Committee.
Chair of the Life CCC, Jan McClelland AM, says of itsAnnual Industry Data and Compliance Report that failing to address claims promptly “…not only breaches Code obligations but also adds unnecessary stress for customers, undermining trust in the industry.”
She says life insurers “…must prioritise meeting claims handling and communication timeframes to improve customer satisfaction and meet community expectations.”
Courtesy of LCCC Annual Data and Compliance Report 2022-23
More generally, the report found that total breaches of Code obligations have increased for a third consecutive year.
Jan McClelland
But, despite the total breaches rising by 9%, it found that the number of customers impacted by breaches declined between 1 July 2022 and 30 June 2023.
McClelland expressed cautious optimism about the findings.
“It is encouraging to see a decrease in the number of customers impacted by breaches for the second year in a row. This indicates we are making headway in delivering better outcomes for consumers.”
She adds that unfortunately “…this positive trend is offset by an overall increase in breaches for the 2022-23 period. This marks the third consecutive year of rising breaches, signalling that there is still much work to be done.”
Courtesy of LCCC Annual Data and Compliance Report 2022-23
… The potential under-reporting of breaches and complaints by some life insurers was another area of concern…
The potential under-reporting of breaches and complaints by some life insurers was another area of concern for the Life CCC.
It says under-reporting “…limits a life insurer’s ability to address issues effectively and improve operations.”
McClelland urged all life insurers to review their processes for detecting, recording, and reporting breaches to ensure transparency and accountability.
…complaints against life insurers have also surged…
The committee says that complaints against life insurers have also surged.
The report noted a link between claims handling breaches “…leading to an increase in complaints and reiterated the importance of meeting claims handling obligations to reduce customer frustration and operational inefficiencies.”
Courtesy of LCCC Annual Data and Compliance Report 2022-23
McClelland says the LCCC expects “…life insurers to take proactive steps to improve compliance and safeguard consumer trust.”
Click here to see the full Annual Data and Compliance Report.
