Australia: Claims handling
APRA has set expectations for improvements to claims handling in the life insurance industry.
The Australian Prudential Regulation Authority (APRA) has contacted Australian insurers and superannuation trustees setting out its expectations for improvements to the oversight and handling of insurance claims. A link to the APRA press release can be found here.
Whilst the letters were addressed to life insurers and superannuation funds, Lloyd’s has been contacted by APRA because some syndicates provide insurance (such as income protection) to some of APRA’s regulated superannuation funds. APRA has recommended that any Lloyd’s syndicates providing such cover also consider the content of the letters and, where appropriate, address any areas for improvement.
Areas for Improvement
APRA has identified a number of areas where insurers could improve practices to better meet expectations. These are:
- Reviewing insurance benefit design and definitions with a stronger focus on delivering insurance benefits appropriate for members at an appropriate level of cost.
- Better sharing of information between insurers and trustees. For example, information that could be shared more readily includes claims data and trends, and regular reporting on key performance indicators.
- Closer co-operation and alignment between trustees, insurers and reinsurers to optimise outcomes for beneficiaries.
- Clarifying the approach to claims in the claims philosophy of both the insurer and trustee to improve claimants’ understanding of how claims will be managed.
Links to the letters sent to life insurers and superannuation trustees can be found here and here.