A multiyear data project covering claims and disputes funded by Australian life insurers is expected to enhance industry transparency and result in better policy design and consumer satisfaction, an industry association CEO said.
"If the royal commission [on financial sector misconduct] taught us anything, it is that industry needs to be more transparent," said Sally Loane, CEO of Australia's Financial Services Council, at the association's Life Insurance Conference in Sydney on March 21.
"We live in an age where it is expected, if not demanded, that information on any topic is available at our fingertips, instantly," Loane added. The four-year data project, which was announced in July 2018, has collected data from 19 Australian life insurers, with another three providing financial support, she said.
Among the project's initial findings, in the fiscal year ended March 31, 2018, more than 102,200 claims on death, trauma, total and permanent disability, income protection, consumer credit insurance, funeral and accident were paid by the life insurance industry, and 92% of those claims were paid in the first instance, Loane said.
The initial statistics also found that "Australian insurers are paying out mental health claims at the same rate as they are occurring in our community," Loane said. "In other words, they are not lagging," she noted.
In 2018, an inquiry known as a royal commission was tasked with examining alleged misconduct in the financial services sector. The commission's final report, published in February, recommended that the life insurance industry establish and impose mandatory industry codes.
Other recommendations included prohibiting the hawking of insurance products, which refers to the selling of insurance policies during unsolicited meetings or telephone calls with retail clients.
Loane said the FSC hopes to further break down information by gender, age and geography to provide "more sophisticated insights" to help life insurers design products in the future, and that the FSC is "broadly supportive of all of the life [insurance] recommendations."
"I believe we owe it to our fellow Australians, our policyholders and those of the future, to right our mistakes, to innovate better products and services and keep working on achieving the best," Loane said. "This is the only way we will regain the trust of the community."