Advisers do Personal Insurance Best

The latest claims data from Australian Prudential Regulation Authority (APRA) suggests that advised life insurance clients may have their claims accepted more often than non-advised customers. APRA’s life insurance claims statistics for June 2023 showed that in the six months to June this year, 97.7% of death claims submitted through the individual advised channel were admitted, compared to 91.1% in the individual non-advised channel.1

The claims paid ratio – the dollar amount of claims paid as a percentage of annual premiums – was also higher in the advised channel for death products, at 44% compared to 40% for the individual non-advised channel.1

For TPD products, 85% of claims in the individual advised channel were admitted in the six months to June, compared to 78.6% for individual non-advised policies.1

For trauma products, 87.9% of claims in the individual advised channel were admitted over the six-month period, compared to 84.8% in the individual non-advised channel.1

The pattern was also similar across income protection with 95% of claims for individual advised policies being admitted in the six months to June 2023, compared to 88.2% of claims for individual non-advised policies.1

Looking at disputes data, advised policies also recorded less disputes than non-advised policies across a number of product categories.

In the six months to June 2023, the dispute lodgment ratio (number of disputes per 100,000 lives insured) for advised death policies was 15, compared to 28 for non-advised death policies.1

For Income Protection products, the dispute lodgment ratio was 318 in the individual advised channel across the six months to June, compared to 427 for the individual non-advised channel.1

The latest data follows similar statistics in 2022 across all life insurance product categories.

In its December 2022 claims statistics release, APRA noted individual advised business showed higher admittance rates than non-advised across the same cover types.2

Commenting on the published results Principal Adviser of Heart Financial Advisers, Stu Varidel said:

“It is no surprise; advisers operate in the retail space where underwriting is done upfront rather than with group cover where uncertainty abounds with the underwriting occurring at claim time. Also, because advisers gave their clients clear expectations of what was covered in their policy and guidance around whether a claim would be successful before it was made. You would be crazy not to use an adviser, simply to improve the likelihood of a successful claim.”

1 APRA Life insurance claims and disputes statistics – industry-level claims and disputes outcomes. Accessed from https://www.apra.gov.au/life-insurance-claims-and-disputes-statistics

2 Life insurance claims and disputes statistics, December 2022. APRA, 18 April 2023