Which life insurers handle claims the fastest? Australian regulators partner to launch transparency program
Collecting and publishing claims data for comparison.
The Australian Prudential and Regulatory Authority (APRA) and Australian Securities & Investments Commission (ASIC) have joined forces to launch a pilot program to help raise the standards of the life insurance industry. The move was initially proposed in 2016 on the back of an ASIC report which found "a clear need for better quality, more consistent and more transparent data about insurance claims".
Finding an insurer that won't look for creative ways to turn down a claim can be often be difficult. However, APRA and ASIC will offer consumer greater transparency by collecting and publishing claims data on a per-insurer basis, including claims handling time-frames and dispute levels.
"Our intention is to collect and publish credible, reliable and comparable data on an insurer-level basis. Such information will enable consumers to better understand insurance products and more confidently engage with insurers," APRA member Geoffery Summerhayes said.
At a time when some life insurance companies are taking years to fully honour claims, being able to compare the way insurers handle claims could yield industry-wide improvements. Meanwhile, a comparative overview of dispute levels between insurers may provide valuable insights into respective payout or denial rates, and whether their customers have been well-informed of each product.
The program's only just been announced and will take some time to get started. Analysing industry awards is one way for consumers to identify top policies but if these policies belonged to an insurer with a reputation for slow claims payouts, buyers may rethink their choice.
Reports have shown some insurers are much less likely to pay claims than others but without being identified, there may be little incentive to update practices. Until the first reports are published, you can learn more about life insurance scandals and why some claims are more likely to be denied.