Connect with us

Hi, what are you looking for?

Loan And Finance

Disability income insurance has highest claims paid ratio: APRA data – Life Insurance – Insurance News

inca social logo


The prudential regulator has again expressed concerns about disability income insurance (DII) products, following the release of its latest claims and disputes data for the rolling 12-month period to June 30.

DII business has the highest claims paid ratio for all distribution channels, ranging from 57% to 121%, the Australian Prudential Regulation Authority (APRA) said.

APRA says the figures imply that the “all-in costs of the products exceed premiums paid.”

Individual-advised DII products have a 57% claims paid ratio, individual non-advised 107%, group super 111% and group ordinary 121%.

“While a ratio of over 100% suggests good value for policyholders, this is not sustainable and will threaten the ongoing availability of [individual] DII for the Australia community in the future,” APRA said.

“APRA is working with the industry to move the product to a sustainable state and thereby deliver better outcomes for policyholders, including through the release of sustainability measures outlining APRA’s expectations and the ongoing review of life companies’ progress in meeting them.”

Data released in August by APRA shows individual DII lost $345.5 million in the year to June 30 and group DII $5.9 million.

Advertisement. Scroll to continue reading.

APRA has already introduced capital measures in the form of upfront penalties for providers who fail to improve the sustainability of DII products.

This month also saw the commencement of two other measures – income at risk and income replacement ratio measures.

The APRA data released last week is based on key industry-level claims and dispute outcomes for 20 Australian life insurers writing direct business.

The overall claims admittance rate for DII and six other cover types across the four distribution channels is 93%.

Death, total and permanent disability, trauma, consumer credit insurance, funeral and accident are the other five products covered by the APRA statistics.

DII products sold through advisers have a 95% claims admittance rate, compared with 89% for non-advised sales. DII policies acquired via group super have a 95% admittance rate and group ordinary 94%.

Click here for the APRA data.

.



Source link

Advertisement. Scroll to continue reading.

Click to comment

Leave a Reply

Latest

Top Stories

Crypto exchange Binance has signed a memorandum of understanding with the Securities and Exchange Regulator of Cambodia (SERC), according to a June 30 announcement. Binance...

Top Stories

When cryptocurrencies like Bitcoin (BTC) go through bear phases like the one we currently find ourselves in, the idea of earning passive income from...

Online Business Success

A representational image of the Federal Board of Revenue building. — APP/File The Federal Board of Revenue (FBR) announced that the last date for...

Top Stories

Bitcoin (BTC) needs to go lower before putting in a macro bottom, one of the market’s most accurate indicators shows. Data from sources including...

Technology

In a nutshell: Intel’s accelerated computing group has started shipping its second-gen Blockscale ASIC for SHA-256 cryptocurrencies like Bitcoin. The launch is months ahead...

Top Stories

Expected to reach a market size of $128 billion by 2028, the longevity sector is no longer something that those outside the medical world...

Advertisement

You May Also Like

Uncategorized

Introductions get a lot of attention. I’ve explored the topic of how to write them even though as a reader, I always skip them....

Online Business Success

The internet is now our nervous system. We are constantly streaming and buying and watching and liking, our brains locked into the global information...

SEO Guide

There are all kinds of pictures of the world on the internet, but to find one of these specific pictures that you want to...

Online Business Success

You can think of link building in many ways. I like to call it tedious, painful, and a test of patience. It’s also necessary...

Advertisement