APRA and ASIC release latest life insurance claims and dispute figures

The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have joined forces to bring to the industry the latest life insurance claims and disputes statistics.

The data presents the key industry and entity-level claims and dispute outcomes for 20 Australian life insurers writing direct business, excluding reinsurance, for the 12 months from January 1, 2021, to December 31, 2021 (FY21).

Focusing on claims, the report showed significant variance in life insurance claims admittance rate between cover types and distribution channels. However, it noted that the number of observations affected the results. For FY21, the life insurance claims admittance rates were:

Death: 97% for individual advised, 90% for individual non-advised, 98% for group super, and 99% for group ordinary;
Total and permanent disability (TPD): 83% for individual advised, 67% for individual non-advised, 89% for group super, and 86% for group ordinary;
Trauma: 87% for individual advised, 81% for individual non-advised, n/a (not applicable) for group super, and 69% for group ordinary;
Disability income insurance (DII): 95% for individual advised, 91% for individual non-advised, 96% for group super, and 95% for group ordinary;
Consumer credit insurance (CCI): n/a for individual advised, 89% for individual non-advised, n/a for group super, and * for group ordinary (meaning the figure was masked because there was only one provider of the product, which reported fewer than 50 finalised claims;
Funeral: n/a for individual advised, 99% for individual non-advised, and n/a for group super and group ordinary; and
Accident: 85% for individual advised and individual non-advised and n/a for group super and group ordinary.

Read more: APRA: More Australians join Members Health funds than the rest of the industry

For the same period, the life insurance claims paid per ratio by cover type and distribution channel were:

Death: 42% for individual advised, 30% for individual non-advised, 67% for group super, and 35% for group ordinary;
TPD: 50% for individual advised, 71% for individual non-advised, 93% for group super, and 44% for group ordinary;
Trauma: 53% for individual advised, 35% for individual non-advised, n/a for group super, and 57% for group ordinary;
DII: 55% for individual advised, 186% for individual non-advised, 113% for group super, and 128% for group ordinary;
CCI: n/a for individual advised, 28% for individual non-advised, n/a for group super, and * for group ordinary;
Funeral: n/a for individual advised, 29% for individual non-advised, and n/a for group super and group ordinary; and
Accident: 3% for individual advised, 18% for individual non-advised, and n/a for group super and group ordinary.

The report also released the dispute lodgement ratio by cover type and distribution channel, as well as dispute outcomes, reversed decisions, and processing duration. For FY21, the life insurance dispute ratio by cover type and distribution channel in Australia were:

Death: 7 for individual advised, 19 for individual non-advised, 1 for group super, and 0 for group ordinary;
TPD: 55 for individual advised, 53 for individual non-advised, 25 for group super, and 6 for group ordinary;
Trauma: 43 for individual advised, 19 for individual non-advised, n/a for group super, and 67 for group ordinary;
DII: 206 for individual advised, 208 for individual non-advised, 53 for group super, and 33 for group ordinary;
CCI: n/a for individual advised, 11 for individual non-advised, n/a for group super, and * for group ordinary;
Funeral: n/a for individual advised, 10 for individual non-advised, and n/a for group super and group ordinary; and
Accident: 54 for individual advised, 8 for individual non-advised, and n/a for group super and group ordinary.

You can find the rest of the data on the APRA website.