The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have released a series of publications and an online tool allowing policyholders – for the first time – to compare life insurers’ performance in handling claims and disputes.

The joint project is the culmination of more than two years of work aimed at collecting and publishing higher-quality, more consistent and transparent data about the life insurance industry. It enables the community to review an individual life insurer’s claims and disputes outcomes, and compare them with other providers. The data release signifies a new level of transparency and accountability which the regulators see as essential to improving trust in financial services. 

The publications reflect the agencies’ different roles, with APRA focused on protecting policyholders by ensuring the soundness and stability of institutions, and ASIC responsible for regulating conduct, disclosure and consumer outcomes.

• APRA has released its inaugural Life Insurance Claims and Disputes Statistics publication, with more than 22,000 data points from 20 insurers including claims and disputes information across all cover types and distribution channels. The data was collected under APRA’s new reporting standard LRS 750 Claims and Disputes, which came into effect in October 2018.
• ASIC’s MoneySmart life insurance claims comparison tool helps consumers to make more informed decisions by showing each insurer’s claims-acceptance rates, average claim time, the number of claims-related disputes and policy cancellation rates.

The data shows that 92 per cent of overall claims are paid in the first instance, and breaks down consumer outcomes according to cover type and distribution channels.

APRA Executive Board Member Geoff Summerhayes said the release of such broad and granular data on life insurance claims and disputes was world-leading practice among global insurance regulators.

'This project represents a joint commitment to enhancing industry transparency and holding life insurers to account for how they treat policyholders,' Mr Summerhayes said.

'APRA’s publications are designed for industry analysts, including our own supervisors who will use them to gain deeper insights into the performance of the life insurers they oversee.'

ASIC Commissioner Sean Hughes said: 'APRA’s data publication is complemented by ASIC’s MoneySmart life insurance claims comparison tool, which helps consumers make informed decisions when buying these complex life insurance products.'

'The online tool compares insurers 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. MoneySmart also provides a life insurance calculator which helps consumers work out if they need life cover, and the right level of cover.

'Together, our agencies will use this data to support stronger supervision of insurers.'

This data will be collected on an ongoing basis, and the resources will be updated twice yearly.

Background

Last year ASIC released REP 587 The sale of direct life insurance which targeted concerns identified in ASIC’s 2016 report REP 498 Life insurance claims: an industry review. ASIC is currently conducting wide-ranging reviews of both consumer credit insurance, and total and permanent disability insurance and will report on its findings later in 2019.