The latest Australian Prudential Regulation Authority (APRA) Life Insurance Claims and Dispute statistics have reinforced the value of group insurance.
The data reveals that members of group insurance schemes within superannuation funds are well served with 98% claims admittance rates with respect to death cover and 91% with respect to total and permanent disability (TPD) insurance.
As well, the data covering the 12 months to the end of December last year, show that disability income insurance (DII) claims admittance stood at 96%.
The APRA data and analysis pointed to the continuing issues surrounding DII insurance.
It noted that, across all distribution channels except group ordinary, “DII business has the highest claims paid ratio, implying that the all-in costs of the products exceed premiums paid”.
“This aligns with the material losses reported by the Australian life insurance industry from 2014 onwards for the individual DII product, and the observations made in APRA’s thematic review into the sustainability of this product,” it said.
Financial advice is having a significant impact on how Australians are engaging with the more complex aspects of their superannuation, new findings have shown.
While the Financial Advice Association Australia said it supports a performance testing regime “in principle”, it holds reservations about expanding this scope to retirement products.
In a Senate submission, the Financial Services Council said super funds should be able to nudge members on engaging with their super and has cautioned against default placements.
The Joint Associations Working Group, which counts FSC in its ranks, has issued an urgent warning to the government.
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