Insurers did not always request information early enough, or consistently meet communication and review commitments when claims were delayed, according to a new report from the Life CCC examining how insurers manage longer-running TPD and IP claims.
Clearer communication, timelier decisions: Improving claims handling in life insurance notes that some claims take longer for legitimate reasons outside an insurer’s control.
Its key findings were:
- Insurers reported they should have requested information earlier in 42 of the 67 TPD claims (62.7%) and 45 of the 116 of income protection claims (38.8%) reviewed
- Required communication became less consistent as claims continued, and some longer claims did not receive the 12-month review required by the Code
- Some insurers have already provided remediation, reported breaches and strengthened their claims-handling processes in response
The committee says its inquiry examined how six insurers managed longer-running TPD and income protection claims where circumstances beyond their control affected decision timeframes.
The report also highlights improvements already underway, including earlier and more targeted information requests, better correspondence, greater technical support for claims managers and closer monitoring of longer claims.
LCCC chair, Jan McClelland AM says in the report that making a total and permanent disability or income protection claim often coincides with serious illness or injury, loss of income, and financial uncertainty.
Delays can prolong that uncertainty…
“Delays can prolong that uncertainty and add to the financial pressure customers may already be experiencing.
“Some delays genuinely arise from circumstances beyond an insurer’s control But insurers must ensure their own processes do not add avoidable delay,” she says.
The LCCC notes it expects all insurers to use the findings to review their own processes and support customers with clear information while claims remain undecided.
Click here to see the full report.
