APRA releases latest life insurance claims and disputes data

Report shows variance in claims admittance rate between different distribution channels

APRA releases latest life insurance claims and disputes data

Insurance News

By Roxanne Libatique

The Australian Prudential Regulation Authority (APRA) has released the Life Insurance Claims and Disputes Statistics publication, covering July 01, 2021, to June 30, 2022.

The latest data presents the key industry and entity-level claims and disputes, with a selection of the published data available in a consumer-friendly format on the Australian Securities and Investment Commission's (ASIC) MoneySmart website.

For the 12 months to June 30, 2022, the report showed significant variance in claims admittance rate between different cover types and distribution channels, from 99% (individual non-advised funeral, group super, and ordinary death) to 67% (individual non-advised TPD).

Generally, individual advised business shows higher admittance rates than individual non-advised for the same cover type, usually due to the policyholder having clearer expectations upfront of what is covered by the product or the adviser discouraging the policyholder from lodging a claim not covered by the policy.

The report also identified significant variance in claims paid ratio between products – ranging from 20% (individual non-advised accident) to 172% (individual on-advised DII). Generally, ratios above 100% indicate that the claims paid exceed premiums received for the 12 months to June 30, 2022.

“As this information is based on finalised claims, these results are affected by the sample size. However, some of the products with the lowest claims paid ratios do have a relatively large sample: individual non-advised CCI (2,479 finalised claims), individual non-advised funeral (14,298 finalised claims), and individual non-advised accident (2,547 finalised claims),” the report said.

Regarding claims processing duration, the report found that TPD has the longest average claims processing duration (approximately 1.2 months), while funeral insurance has the shortest (approximately 0.7 months), reflecting the difference in the respective complexity of these products. For death, accident, and funeral, most claims were finalised within zero to two weeks.

See the latest data on life insurance claims and disputes on the APRA website.

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