The Australian Prudential Regulation Authority (ARPRA) has released the latest insurance claims and disputes statistics covering industry and insurer-level data.
The report shows the key industry-level claims and disputes outcomes for 17 Australian life insurers writing direct business, excluding reinsurance, for the year ended June 2018 to December 2022.
The claims paid ratios for group products peaked in early 2021 but have been spiralling down ever since. By contrast, the claims paid ratios for individual products have remained stable.
“Compared to group products, individual products tend to have lower claims paid ratios due to higher acquisition costs associated with the policy. As this is reflected in the premium charged, the claims payments for these products will generally be a lower percentage of the premium income,” APRA said.
The claims paid ratios for death and trauma decreased over the years. By contrast, the ratios for total and permanent disability (TPD) and disability income insurance (DII) peaked in December 2020 before returning to 70% to 80%.
APRA found a dramatic increase in the dispute lodgement ratios related to individual outcomes since June 2021, driven by various repricing activities undertaken to address DII's sustainability issues.
“The dispute lodgement ratios for DII have increased considerably over time. In general, more complex products are likely to have higher dispute lodgement ratios. TPD, trauma, and DII in particular show relatively high ratios. While DII shows higher ratios than TPD and trauma, it also has a higher claims frequency,” the report said.
See the rest of the report and key data on the APRA website.
