A new study of financial advisers by online rating platform Adviser Ratings has revealed the poorest-performing insurance companies in the handling, disputing and denial of personal life insurance claims filed by Australians.
The companies under consideration cover more than 90 per cent of the market. Tellingly, Real Insurance and CommInsure had the lowest satisfaction score, with 45 per cent and 42 per cent of advisers, respectively, rating them as the poorest-performing insurers.
The 2016 Adviser Sentiment Life Insurance Report is a robust state-of-the-industry study that clearly identifies insurers in terms of the claims process in life insurance, income protection, trauma, and Total and Permanent Disability (TPD) insurance.
Based on the satisfaction levels of financial advisers, the research has revealed Hannover Re (Real Insurance), CommInsure, St Andrew’s Life, Metlife and Allianz as the five poorest-performing insurance companies for claims conduct.
Following the Australian Securities and Investments Commission’s (ASIC) recent review of the life insurance sector’s handling of claims in October 2016, which refused to name the insurers with higher denial rates, the Adviser Ratings findings give consumers even greater transparency by ranking the same 15 insurers in order of adviser satisfaction.
The research also revealed the five most highly-rated insurance companies in the life insurance claims process as Asteron Life (27%), AIA Australia (24%), TAL Life (23%), Zurich Australia (23%), and One Path (22%), according to aligned and non-aligned financial advisers.
Adviser Ratings Managing Director, Angus Woods, said public access to information that clarified the insurance companies which inadequately handle claims is important to empower consumers and highlight the major shortcomings in the life insurance industry.
“The perspective of financial advisers is a valuable consideration when determining the best life insurance policies, as these professionals are at the front-line of the claims process, acting on behalf of clients who are attempting to claim against retail life, and often group life and direct life policies,” said Angus Woods.
“Crowd-sourced wisdom provides an even greater and more powerful source of regulation,” said Mr Woods.
“Australian consumers have a right to know which companies are the most likely to make the claims process difficult for them,” Mr Woods added.
Significantly, the latest ASIC report into claims handling practices in the life insurance industry also found that there were higher rates of rejected claims when insurance was sold directly to consumers, without financial advice.
“It is more vital than ever that Australians have access to sensible, transparent information and direction around policy types and claims – free from conflict of interest and malpractice. The passing of a loved one or an accident at work is stressful enough without the instance of a slow or rejected claim,” said Mr Woods.
The findings provide a useful foundation for further industry improvements in 2017, led by the establishment of a consistent public reporting regime for claims data and claims outcomes.
The research aligns closely with Adviser Ratings’ function as the only consumer-driven online platform that holds the advice industry and its professionals accountable, while also providing an opportunity for advisers to have a unifying voice on the changes they require to better service the claims experience for their clients.