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APRA and ASIC publish latest data on life insurance claims and disputes

Thursday 27 June 2019

 

The Australian Prudential Regulation Authority (APRA) has released its Life Insurance Claims and Disputes Statistics publication, covering a rolling 12-month period from 1 January 2018 to 31 December 2018.
 
The data is the product of a world-leading joint project between APRA and the Australian Securities and Investments Commission (ASIC), aimed at making it easier to compare life insurers’ performance in handling claims and disputes. This is the second publication using the full data set since it was launched in March 2019.

APRA’s Life Insurance Claims and Disputes Statistics publication presents the key industry and entity-level claims and disputes outcomes for 20 Australian life insurers writing direct business (i.e. excluding reinsurance).

ASIC’s MoneySmart Life insurance claims comparison tool has been updated with the latest data. The online tool compares insurers across cover types and distribution channels on four metrics – the percentage of claims accepted, the length of time taken to pay claims, the number of disputes and the policy cancellation rates. In the first month the tool was available, 4716 consumers undertook 19,519 comparisons. 
The admittance rate by cover type and channel for the 12 months to December 2018:
 
  Individual Advised Individual 
Non-Advised
Group Super Group Ordinary
Cover Type % admitted % admitted % admitted % admitted
Death 96% 88% 98% 99%
TPD ^ 87% 59% 88% 68%
Trauma 87% 87% n/a 100%
DII ^ 95% 85% 96% 95%
CCI ^ n/a 89% n/a *
Funeral  n/a 99% n/a n/a
Accident 19% 82% n/a n/a
(^Total and Permanent Disability Insurance (TPD), Disability Income Insurance (DII), Consumer Credit Insurance (CCI)).
(* In this publication, Group Ordinary CCI is masked as there was only one provider of this product, which reported fewer than 50 finalised claims).
 
The claims paid ratio^ by cover type and channel for the 12 months to December 2018:
 
Cover type Individual Advised Individual 
Non-Advised
Group Super Group Ordinary
Death 39% 32% 78% 61%
TPD 45% 28% 71% 25%
Trauma 62% 40% n/a 94%
DII # 66% 85% 104% 81%
CCI n/a 26% n/a *
Funeral n/a 23% n/a n/a
Accident 25% 51% n/a n/a
(^ The claims paid ratio is the dollar amount of claims paid out in the reporting period as a percentage of the annual premiums receivable in the same period).
(# DII has recurring monthly payments. For the purposes of the reported claims ratio, total payments are approximated using an average 24-month payout period).
 
The PDF and spreadsheet version of the Life Insurance Claims and Disputes Statistics publication provide additional detail and analysis. They are available on the APRA website here
Statistics

Media enquiries

Contact Ben McLean, APRA Media Unit, on +61 2 9210 3024

All other enquiries

For more information contact APRA on 1300 558 849.

The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding $6.5 trillion in assets for Australian depositors, policyholders and superannuation fund members.